India Launches Disinvestment Plan; SJVN IPO

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
29 Apr, 2010
New York City

The benchmark Sensex index rebounded from the largest one day drop in three months on better than expected earnings, recovering global markets and inflation data. Food price declined in the period. The government launched disinvestment with the proposed 10% stake sale in SJVN Ltd.

[R]6:00 PM Mumbai, 8:30 AM New York – The benchmark Sensex index rebounded from the largest one day drop in three months on better than expected earnings, recovering global markets and inflation data. Food price declined in the period. The government launched disinvestment with the proposed 10% stake sale in SJVN Ltd.[/R]

The benchmark Sensex index rebounded from the largest one day drop in three months on better than expected earnings, recovering global markets and inflation data.

The wholesale price index increased 0.1% to 289.9 from 289.7 for the previous week. For the year ending in the week average inflation surged to 13.55% compared to 6.55% in the same period a year ago according to the latest data from commerce ministry.

Food prices at the end of week on April 17 increased at 16.61% compared to 17.65% at the end of previous week.

Siemens Rolling Stock Pvt Ltd, a 100% subsidiary of Siemens Limited set up the first dedicated bogie plant at Aurangabad with an investment of Rs 200 crore. The factory will provide direct employment to 250 people and indirect employment to about 1,000 people.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said at a conference of ministers in New Delhi that it will form a committee to study the causes of electric power transmission theft that is estimated to cost utility companies Rs 60,000 crore.

India’s coffee consumption may climb to 120,000 tons by 2012 from 102,000 tons last year, said G.V. Krishna Rau, Chairman of state controlled Coffee Board in Bangalore yesterday.

If this trend continues India from an exporter may become a net importer in a decade according to the Coffee Board. India may import Arabic variety of coffee and continue to export Robusta coffee according to chairman Rau.

The Sensex index in India increased 123.39 or 0.71% to 17,503.47 and CNX Nifty index rose 30.85 or 0.59% to 5,246.30. Among the Sensex 30 stocks, 20 rose and 10 fell.

On BSE trading, 1,933 stocks advanced, 906 declined and 96 were unchanged. Interest rate sensitive auto stocks and banks closed higher. Tea stocks advanced on firm global tea prices.

The government today launched its disinvestment program for the fiscal year 2011 with the initial public offering of the state-run SJVN Ltd. The government plans to raise Rs 1,000 crore through the IPO and sell 10% stake in the company.

Jaiprakash Associates rose 0.44% as the initial public offer of its infrastructure unit Jaypee Infratech opened for bidding today. Jaiprakash Associates is offering 6 crore shares.

Rupee edged higher 8 paisa to Rs 44.56 against one dollar.

Gainers & Losers

Alfa Laval (India) Limited rose 0.1% to Rs 1,402.75 after the manufacturer of industrial equipment and process solutions said first quarter sales fell 5% to Rs 189.6 crore from Rs 199.0 crore a year ago. Net profit for the quarter rose 3% to Rs 24.9 crore compared to net profit of Rs 24.1 crore a year ago.

Alstom Projects India Limited fell 0.3% to Rs 608.40 after the power and transport company said fourth quarter sales fell 24% to Rs 612.4 crore from Rs 807.7 crore a year ago. Net profit for the quarter rose 82% to Rs 47.6 crore or Rs 7.10 per share compared to net profit of Rs 26.2 crore or Rs 3.91 per share a year ago.

Andhra Bank gained 5.2% to Rs 127.25 after the bank said fourth quarter net interest income rose 66% to Rs 656 crore from Rs 395 crore a year ago. Net profit for the quarter rose 19.4% to Rs 240 crore compared to net profit of Rs 201 crore a year ago.

Biocon Limited rose 2.4% to Rs 301.50 after the company net profit spurted 214.9% to Rs 293.25 crore.

Bharti Airtel Ltd, India’s largest mobile phone company expands in 17 nations while its earnings declined at home. The challenges are immense said Akhil Gupta Dy CEO of the parent Bharti Enterprises Ltd. Acquisition of Zain’s assets in Africa will pit Bharti Airtel against Vodafone the world’s biggest carrier and MTN Group Ltd, Africa’s largest operator. The move is seen as a long-term growth ploy in a very competitive field.

Dabur India Limited rose 0.4% to Rs 180.75 after the ayurvedic and natural healthcare company said fourth quarter sales rose 16% to Rs 849 crore from Rs 732 crore a year ago. Net profit for the quarter rose 30% to Rs 135 crore or Rs 1.56 per share compared to net profit of Rs 104 crore or Rs 1.21 per share a year ago.

Eicher Motors Limited surged 14.1% to Rs 782.55 after the provider of automobile and related components said third quarter sales rose 75% to Rs 1,038 crore from Rs 592 crore a year ago. Net profit for the quarter rose 154% to Rs 40.2 crore compared to net profit of Rs 15.8 crore a year ago.

Housing Development Finance Corporation Limited added 0.6% to Rs 2,829.90 after the mortgage lender said its board will consider stock-split on May 3.

Manaksia Limited rose 4.9% to Rs 136.80 after the company''s board approved buyback of equity shares of the company at a maximum price of Rs 200 per share at 46.2% premium.

MindTree Limited plunged 10.5% to Rs 571.65 after the IT services firm said it will develop a 3G smartphone based on Google Inc''s Android platform, and launch the product in the second half of fiscal year 2011.

MRF Limited fell 0.01% to Rs 7,054.45 after the manufacturer of tyres said second quarter sales rose 26% to Rs 1,767.6 crore from Rs 1,404.7 crore a year ago. Net profit for the quarter rose 39.4% to Rs 95.8 crore compared to net profit of Rs 68.7 crore a year ago.

Oriental Bank of Commerce added 3.0% to Rs 346.15 after the bank said fourth quarter net interest income rose 115% to Rs 989.4 crore from Rs 460.3 crore a year ago. Net profit for the quarter rose 62% to Rs 317 crore compared to net profit of Rs 195.8 crore a year ago.

Siemens Limited dropped 0.4% to Rs 708.05 after the company said second quarter sales fell 6.7% to Rs 2,212 crore from Rs 2,368 crore a year ago. Net profit for the quarter fell 19.5% to Rs 181 crore compared to net profit of Rs 225 crore a year ago.

Tata Steel Limited added 2.1% to Rs 637.75 after the UK steelmaker Corus said it will raise prices for structural shaped steel used in the construction industry by 80 pounds ($122.2) a ton on all deliveries from May 30.

Tantia Constructions Limited rose 1.0% to Rs 119.20 after the company secured an order of Rs 20.52 crore from Chennai Metro Rail.