IL&FS Financial Services sells 15 lakh shares of Gati: Report

IL&FS Financial Services has reportedly sold 15 lakh shares of Gati through the open market route. The company has sold 6 lakh shares at Rs 35.75 per share on BSE, while remaining 9 lakh shares were sold at Rs 35.33 per share on NSE.

Gati is a leading player in express distribution and logistics and operates through two divisions - Express Distribution & Supply Chain (EDSC) and Coast- to-Coast (C2C) division. It also operates two container yards at Chennai and Port Blair which increases capability and provides for efficient handling of the cargo.

Nifty ends below 6300 mark

Finally, BSE Sensex closed at 21143 down 51 points, while NSE Nifty closed at 6291 down 23 points over the previous close.

The Indian equity market ended with marginal losses on Monday as the Nifty index struggled to sustain above the 6300 mark. Sentiment was hit after the Reserve Bank of India (RBI) in its Financial Stability Report flagged concerns over continuing high inflation amid growth slowdown. 

The Banking stocks were under pressure throughout the day after RBI said “The risks to the banking sector have further increased during the past half-year. All major risk dimensions captured in the Banking Stability Indicator show increase in vulnerabilities in the banking sector,”

The RBI also warned that any political instability after May 2014, post-results, will drag the beleaguered economy further down, and that a stable new government would be desirable.

The realty, banking, IT and select capital goods stocks were among the top losers. Even the mid-cap stocks were under pressure. However, the small-cap stocks again managed to outperform the benchmark indices as the BSE Small-Cap index ended with gained of 0.2%.

On the other hand, the metals, oil and gas and select FMCG stocks ended with marginal gains.

On the currency front, the Indian rupee weakened against the US Dollar on Monday, the rupee was trading around the 62.37 per Dollar versus its close of 61.85/86 on Friday.

United Spirits gains after getting CCI's approval for sale of Tamil Nadu distillery to Enrica

The promoters holding in the company stood at 36.15 % while Institutions and Non-Institutions held 47.40 % and 16.14 % respectively. Fair trade watchdog Competition Commission of India (CCI) has approved United Spirits’ proposed sale of a distillery in Tamil Nadu to Enrica Enterprises, as the deal does not raise adverse competition concerns.

The deal comprises hiving off all the operations at the unit of United Spirits that manufactures Indian Made Foreign Spirits (IMFS) to Enrica, by way of slump sale on a going concern basis. The unit is located at Poonamallee, Chennai.

Post-deal, Enrica would make certain IMFS brands of United Spirits using technology and know-how and under the trademark of the Vijay Mallya’s led company.

Recently, the Karnataka High Court ruled as void a part of the sale of share of United Spirits (USL), by United Breweries Holdings, to Diageo. The court overturned an order, passed in March by a single-judge Bench in the company court, allowing Vijay Mallya’s UB Holdings to sell a significant part of its stake in USL to Diageo.

RBI lifts curbs on buying shares in Axis Bank by FIIs

After the government's approval to increase foreign shareholding in Axis Bank to 62%, Reserve Bank of India (RBI) has lifted curbs imposed on purchase of the Bank's shares by foreign institutional investors (FIIs). The aggregate share holdings through Foreign Institutional Investor (FII) / Non Resident Indian (NRI) / Person of Indian Origin (PIO) / Foreign Direct Investment (FDI) / American Depository Receipt (ADR) / Global Depository Receipt (GDR) in Axis Bank have gone below the prescribed threshold caution limit stipulated under the extant FDI Policy.

Earlier, the Bank had received approval Cabinet Committee on Economic Affairs (CCEA) to increase foreign investment in the bank from 49% to 62%. This approval would result in foreign investment of Rs.7,250 crore (approximately) in the country.

Axis Bank is the third-largest private sector bank in India. As on June 30, 2013, it had a network of 2021 branches including extension counters and 11,488 automated teller machines (ATMs) across the country.

Bharti Airtel chooses ZTE for deployment of 4-G LTE network: Report

Bharti Airtel has reportedly selected ZTE Corporation, a globally-leading provider of telecommunications equipment and network solutions, for deployment of 4-G LTE network. Airtel 4G services are available in Kolkata, Bangalore, Pune and Chandigarh region (The Tricity or Chandigarh region consists of a major city Chandigarh, Mohali and Panchkula.

ZTE Corporation is having operations in 160 countries, the company is a leader in technology innovation, delivering superior products and business solutions to clients all over the world.

Bharti Airtel is a leading integrated telecommunications company with operations in 20 countries across Asia and Africa. The company ranks amongst the top 5 mobile service providers globally in terms of subscribers.

Canara Bank plans to open 14 new branches in overseas locations: Report

Canara Bank, a leading nationalized bank, is reportedly planning to open 14 new branches in overseas locations over the next 2 years. Of which the bank will open one branch in Johannesburg in the next three months, followed by those in New York, Dubai and Frankfurt by September 2014. While remaining ten branches in Sao Paolo, Dar-es-Salaam, Tokyo, Abuja, Jeddah, Qatar, Sydney, Ontario, Wellington and Singapore are awaiting regulatory approvals. Currently, the bank has five branches and three representative offices overseas. The bank is also planning to increase the share of overseas business from about 6% currently to 15-20% over the next 2 to 3 years.

Canara Bank is India’s fifth largest Public Sector bank (PSB) in terms of assets. As on September 30, 2013, it had assets of around Rs 4,50,200 crore and advances of around Rs 281100 crore. The bank’s strong market position is underpinned by its market share of around 5.0 percent in deposits and 4.8 percent in advances as on September 30, 2013.

JSW Steel extend gains on plan to hike steel prices by 2% from January

JSW Steel is planning to hike steel prices by two per cent from January on the back of rise in production cost. The steel production cost has gone up by Rs 400-600 a tonne on the back of the recent rise in iron ore prices by Rs 200-300 a tonne. Moreover, the price rise of $30 and $20 a tonne in HBI (hot-briquetted iron) and coking coal will also have an impact on the costs.

Following the price hike, the mark-up in prices would range from Rs 700 to Rs 1,000 a tonne, depending on the product specification.

Recently, the company’s crude steel production in November, 2013 increased by 78% and stood at 10.72 lakh tonnes against 6.03 lakh tonnes in November, 2012. The production of rolled products (flat) increased by 61% to 8.31 lakh tonnes compared to 5.15 lakh tonnes in November last year.

JSW Steel is part of the JSW group which, in turn, is a part of the O P Jindal group. JSW Steel is one of the largest steel manufacturing companies in India having units in Karnataka and Maharashtra producing crude steel, long steel and flat steel products.

Risks to the banking sector increased in last six months: RBI

Reserve Bank of India (RBI), in its ‘Financial Stability Report – December 2013’, has underscored that risks to the banking sector have increased during the past half-year and that all the risks dimensions captured in the banking stability indicator show increase in vulnerabilities in the banking sector. As per the report banking stability measures, based on co-movements in banks' equity prices, also indicate that the distress dependencies within the banking system have risen during this period.

Further, the analysis shows that failure of a major corporate or a major corporate group could trigger a contagion in the banking system due to exposures of a large number of banks to such corporates. Additionally, RBI in its report expressed concerns over asset quality of banks. It highlighted that macro stress tests on credit risk suggest that if the adverse macroeconomic conditions persist, the credit quality of commercial banks could deteriorate further. However, it also underscored that under improved conditions, the present trend in credit quality may reverse during the second half of 2014-15.

Moreover, RBI remained more distressed over asset quality of Scheduled Commercial Banks (SCBs). It noted that Gross Non-performing Assets (GNPA) ratio of SCBs as well as their restructured standard advances ratio increased and therefore the total stressed advances ratio rose significantly to 10.2 per cent of total advances as at end September 2013 from 9.2 per cent of March 2013.

SEBI to issue new set of norms soon to deal with insider trading menace

In order to deal with insider trading menace, the Securities and Exchange Board of India (SEBI) will soon put in place a new set of norms, which would clearly demarcate mistakes from serious violations committed by top corporate executives and other connected entities while trading in shares of listed companies. New regulations would replace nearly two-decade old insider trading norms currently in operation. SEBI chairman U K Sinha stated that new norms will be finalized on the basis of an expert panel's suggestions and public comments on this issue, which would strengthen the system for controlling and preventing insider trading, besides providing more clarity to the company executives, promoters and others on their trading activities.

Further, new guidelines for insider trading are likely to put in place stricter penalties for those found to be indulging in insider trading activities. While, the draft has already proposed that public servants, regulators and persons holding statutory positions should be brought under its purview if they are handling share price-sensitive information about listed companies. Moreover, expert panel has also suggested to put in place a new concept for providing a pre-decided or pre-scheduled trading calendar, which is already functioning in many advanced markets.

U K Sinha further added that it is difficult to stop trading by company’s management such as CEO or CFO, who have some exclusive information around the year. Presently, SEBI has a closing window for trading by such persons. Therefore, in order to check insider trading, SEBI has also planned to introduce a pre-scheduled trading pattern for such persons. Further, proposed regulations would put in place a very clear definition for connected persons and thereby prohibit top corporate executives from trading having access to unpublished price sensitive information (UPSI). 

Indian economy likely to grow at 7.5-8% next year: Ahluwalia

As per Deputy Chairman of Planning Commission Montek Singh Ahluwalia the Indian economy is likely to grow at a pace of 7.5-8 percent in the next year. Ahluwalia asserted that in a globalised world India cannot become self-reliant and the prevailing economic slowdown is mainly caused by global factors and partially by domestic factors.

Referring to the Indian economic growth over the period of time, Ahluwalia emphasized that reforms have been carried out gradually in large diversified highly democratic country in order to pick up economic growth. However, it takes time to bring economic turnaround. The Indian economy grew by 9 percent for five years in the previous decade, while it came down to 6 percent due to the global financial crisis.

Presently, domestic economy growth has recorded to 4.8 percent in Q2 FY14 as comparison to 4.4 percent in Q1 FY14. Furthermore, the current account deficit (CAD) has narrowed to $5.2 billion, or 1.2% of GDP in Q2 FY14 as against the 4.9% of GDP in the Q1 FY14 on the back of growing exports and declining imports of the country.

CII survey shows signs of economic turnaround

Showing early signs of revival in business sentiments and coming as a major relief for the economy, which has been struggling with slowdown for the last several quarters, the CII Business Confidence Index (BCI) increased sharply to 54.9 during the October-December period of 2013-14 fiscal, from 45.7 in the previous quarter. CII Director General Chandrajit Banerjee stated that with the growing export performance and declining country’s imports, the slowdown in the domestic economy may have bottomed out in the second quarter and the trend could reverse henceforth.

Further, the survey highlighted that 58 percent of the respondents expect an increase in their sales in the third quarter of 2013-14 as against the 45 percent respondents during the previous quarter. A majority of the respondents around 42 percent felt that GDP growth in the current fiscal would remain in the range of 4.5 to 5 percent, whereas only 28 percent expected it to be in the range of 5 to 5.5 percent. Referring to exports’ growth outlook, CII survey noted that 53 percent of firms expect their exports to increase in the current quarter, up from 49 percent in the previous quarter. Moreover, 53 percent of the survey respondents expect fiscal deficit to remain below 5 percent mark despite the fact that subsidies will cross the budgeted target by a wide margin, and the impending general elections pose upside risk to government expenditure.

However, the CCI survey cautioned that the downside risks to economy’s growth have still not abated and supply side bottlenecks continue to pose a problem. CII has highlighted that the government should be careful about the upward risk to fiscal deficit amid falling tax collection and growing chances of disinvestment proceeds falling well short of target. Survey further noted that domestic economic and political instability, slackening consumer demand, high level of corruption, persistent high inflation and risk from exchange rate volatility are the top five concerns eroding the business sentiments in the country.

Bosch suspends manufacturing operation at Jaipur Plant for 2 days

Bosch has suspended their manufacturing operations at Jaipur Plant from December 30, 2013 to December 31, 2013 with a view to adjust production to meet the demand for products and to avoid unnecessary buildup of inventory.

Bosch is a major player in the diesel segment and 60% of its sales come from diesel segment. It is also among the larger suppliers of common rail direct injection (CRDI) systems in India. The company buys half of the components required for the CRDI systems (by value) locally.

Power Grid gets nod to raise FII cap limit to 30%

Power Grid Corporation of India has received its members’ nod to raise the limit of holdings by foreign institutional investors to 30% from 24% currently. The company's shareholders also approved a proposal to increase the company's borrowing limit to Rs 1,30,000 crore from the current cap of Rs 1,00,000 crore.

Last month, the company had said that increasing the limit would provide more headroom for FII investments in the company. FII holdings have been on the rise since the company's first follow-on public offer in 2010.

At the end of September 2013, the promoters holding in the company stood at 69.42% while institutions and non-institutions held 23.69% and 6.88% stake in the company, respectively.

Power Grid is engaged in bulk power transmission and its responsibility include planning, coordination, supervision and control over inter-State transmission system and operation of National and Regional Power Grids.

HCL Technologies’ arm to develop proposed IT City in Lucknow

HCL Technologies’ investment arm -- Vamasundari Investments -- has been selected to develop the proposed IT City in Lucknow. The project is estimated to cost around Rs 1,500 crore. The company’s arm will develop the project under the public private partnership (PPP) model.

The company would be required to form a special purpose vehicle (SPV) to build development and skill development centres over 30 acres and 10 acres respectively in two to four years.

Earlier, 100 acres land had been transferred to the state IT department at Chak Gajaria on Lucknow-Sultanpur highway in Lucknow district.

Idea Cellular gets nod to raise investment limit for overseas investors to 49%

Idea Cellular has received its shareholders’ approval to increase the investment limit for overseas investors to 49%. At present, FII share holding in the company is about 17.95% of the paid up capital. Holding of overseas investors in the company has consistently risen in the past few quarters.

The Aditya Birla group company’s move seeking nod for hiking the cap comes ahead of the next round of spectrum auctions scheduled to be held in February 2014. Meanwhile, the company’s board has already passed an enabling resolution to raise funds of upto Rs 3,000 crore through the Qualified Institutional Placements route.

At the end of September 2013, the promoters holding in the company stood at 45.85% while institutions and non-institutions held 22.19% and 31.96% stake in the company, respectively.

Welspun Corp’s arm enters into share sale agreement with Leighton Group

Welspun Corp’s (WCL) - subsidiary, Welspun Infra Projects (WIPPL), has entered into a share sale agreement with Leighton Group to sell Welspun’s entire 39.88% stake in Leighton Welspun Contractors India (LWIN) for the net cash consideration of $99 million. With this sale, LWIN will be renamed as Leighton India.

 In 2011, Welspun Corp acquired a 35% stake in LWIN for cash consideration of Rs 470 crore, to capitalize on opportunities in the Indian infrastructure sector especially Public-Private Partnership projects and subsequently acquired additional shares in the entity in a cash-less transaction worth Rs 115 crore.

The company has decided to exit LWIN to enable Welspun to redirect its efforts and reposition itself in the infrastructure space which has synergies with its other businesses. To streamline the structure, Welspun Infratech has also entered into an agreement with Welspun Infra Developers to acquire its 40% stake in WIPPL.

The net proceeds received by Welspun will primarily be utilized to deleverage its balance-sheet. Welspun Group intends to concentrate on businesses which have potential to give it scale consistent with its quest for being in leadership position. The transaction between Welspun Corp and Leighton Group shall be completed in the first quarter of 2014 once the procedural conditions are met.

Welspun Corp is currently in four businesses viz Line Pipes, Energy, Infrastructure & Steel and enjoys a global leadership position in the first two businesses. It may be recalled that Welspun Corp is already in advanced stages of demerging the parts of its business other than Line Pipes into Welspun Enterprises through a court process.  

Adani Power to demerge transmission line business to WOS

Adani Power has received an approval for demerger of the transmission line business of the company to its wholly owned subsidiary company (WOS) subject to requisite approvals and also approved the valuation report (by BSR & Associates, Chartered Accountants), fairness opinion (by ICICI Securities) and the scheme of demerger. The board of directors at its meeting held on December 28, 2013 has approved for the same.

Adani Power is engaged in the business of generation, accumulation, distribution and supply of power and to generally deal in electricity and to explore, develop, generate, accumulate, supply and distribute or to deal in other forms of energy from any source whatsoever.

SSLT receives permission for resumption of mining operations at Karnataka

Sesa Sterlite (SSLT) (formerly Sesa Goa) has received permission from the Supreme Court appointed Monitoring Committee to resume the mining activities at its Karnataka mine. Accordingly, the company has commenced its mining operations from December 28, 2013, in accordance with stipulated conditions.

The Supreme Court of India had earlier given the clearance for resumption of mining operations for A and B category mines in Karnataka, vide its order dated April 18, 2013.

Sesa Sterlite is one of the world’s largest diversified natural resource companies. Its business primarily involves exploring, extracting and processing minerals and oil & gas.

Markets to get a positive start of the new week

The Indian markets showed good enthusiasm in last session and benchmarks surged by over half a percent, good global cues and some government initiatives led the markets higher. Today the start of the new week and the penultimate day of the calendar year is likely to be positive tailing global peers. Traders will be taking support with the report showing signs of economic turnaround, the CII Business Confidence Index (BCI) rose sharply to 54.9 during the October-December period of 2013-14 fiscal, from 45.7 in the previous quarter. Also, the Deputy Chairman of Planning Commission Montek Singh Ahluwalia has said that the economic growth rate was expected to be at 7.5-8 percent next year. There will be some action in the power stocks, as the Cabinet Committee on Economic Affairs is likely to take up the Power Ministry's proposal to amend the Mega Power Policy this week. On the other hand the telecom stocks too will keep buzzing, as the government has delayed the planned mobile phone spectrum auction in the 900 and 1800 megahertz frequency bands by 10 days from the original schedule, it will now start on February 3. PSU OMC may come under pressure on talks of increasing the subsidized cylinder cap for households.

The US markets ended marginally down in last session lacking any major economic release, while majority of traders remained in holiday mood. The Asian markets have made a green start and Japanese market was trading higher as the yen touched a five-year low versus the dollar.

Back home, Indian equity benchmarks kick started the new F&O series on a positive note with frontline gauges garnering gain of over half percentage point on last trading day of the week, buoyed by supportive global cues coupled with appreciation in Indian rupee against dollar. During the session, the frontline equity indices traded in an extremely tight range hardly budging from the psychological 6,300 (Nifty) and 21,200 (Sensex) levels. Nevertheless, markets traded in the green terrain throughout the day and settled near their intraday high. Sentiments remained up-beat since morning after data showed that foreign funds were net buyers of Indian stocks on December 26, 2013. Some support also came in from currency front where Indian rupee appreciated against dollar on the back of dollar sale by state-run banks on behalf of the Reserve Bank of India (RBI). Supportive cues from US markets provided the much needed support to local markets in early deals; rally in Asian markets too boosted the traders’ morale. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated in the rally. Buying in select power space too supported the sentiments, as the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, relaxed the coal tapering linkage policy for nine power projects with investments worth Rs 60,000 crore. Moreover, sugar stocks too remained on the buyers’ radar as the cabinet okayed guidelines for interest-free loan to sugar mills, making it clear to sugar mill owners that the interest-free loan of Rs 6,600 crore is meant “exclusively” to pay the cane price including arrears to farmers. Rally in software and technology counters too aided the sentiments with stocks like Infosys, TCS, Wipro, Tech Mahindra and HCL Technologies all edging higher after recent data from US pointed to a sturdier US economy, further brightening the outlook for India’s export-dependent IT sector. Additionally, banking stocks too edged higher, with Axis bank extending previous session’s gains triggered by the government’s decision to clear a proposal of the bank for increase in foreign investment ceiling in the bank to 62% from 49%, while PSU banks, like Allahabad bank and Dena Bank, too were up on capital infusion from GoI. Finally, the BSE Sensex surged by 118.99 points or 0.56%, to settle at 21193.58, while the CNX Nifty gained 34.90 points or 0.56% to settle at 6,313.80.