Sensex Drops; Essar Energy IPO Listed on LSE

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
06 May, 2010
New York City

Stocks in Mumbai traded lower. Mediaone Global Entertainment hits the roof on bonus plan. ICICI eyes stake in Bank of Rajasthan. Glenmark unit signs licensing pact with Taro Pharmaceuticals unit.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded lower. Mediaone Global Entertainment hits the roof on bonus plan. ICICI eyes stake in Bank of Rajasthan. Glenmark unit signs licensing pact with Taro Pharmaceuticals unit.[/R]

The benchmark index Sensex fell, as stocks fell for the fourth straight day, putting it on course for the worst weekly performance in more than three months.

The wholesale price index increased 0.4% to 291.2 from 289.9 for the previous week. For the year ending in the week average inflation surged 13.93% compared to 6.77% in the same period a year ago.

Rupee fell to a five week low on concern importers will step up purchase of the US currency to pay for their shipments after a gauge that tracks the dollar’s strength touched a one-year high.

The Dollar Index, which tracks the greenback against currencies of six major trading partners of the US, touched 84.307 yesterday, the highest level since May 2009 as per data compiled by Bloomberg.

Shares of the state-owned oil marketing companies gained at Mumbai trading after the Finance Ministry on Wednesday agreed to give an additional compensation of Rs 14,000 crore.

The department had previously released Rs 12,000 crore as compensation to make up for part of revenue lost by them on selling fuels below cost to contain inflation.

Stating that rapid economic growth and industrialization were the major challenges that needed to be met head on, Union Power Minister, Sushil Kumar Shinde said power generation capacity addition during the XI plan would be about 74,000 MW almost close to the budgeted target of 78,577 MW.

He was speaking at the ‘National campaign for energy efficiency and conservation’ organized by the Federation of Indian Chambers of Commerce and Industry at New Delhi on Wednesday.

Max Bupa, the health insurance provider will invest Rs 700 crore in working capital and solvency over the next five years, said Damien Mormion while formally inaugurating the company’s operations in the Indian state of Andhra Pradesh on Wednesday.

Max Bupa Health Insurance is a joint venture between Max India and UK-based healthcare services expert Bupa. The company’s first policy called ‘Heartbeat Health Insurance’ was launched at the function.

Essar Energy will raise $1.94 billion through its initial public offer on the London Stock Exchange. The figure is lower than what it had targeted earlier, as the company had to revise the price to 420 pence a share from its previous range of 450 to 550 pence. The IPO coincided with volatility in the stock market after a wave of credit downgrades rattled investor confidence this week.

At $1.94 billion it will be the second largest issue on the LSE after October 2007.

The Sensex index in India decreased 100.43 or 0.59% to 16,987.53 and CNX Nifty index fell 44.50 or 0.87% to 5,080.40. Among the Sensex 30 stocks, 10 rose and 20 fell.

On BSE trading, 1,185 stocks advanced, 1,583 declined and 95 were unchanged. Realty and metal stocks fell. Reliance Industries edged lower. But, ICICI Bank reversed losses.

Shares of two state-run oil marketing companies rose 0.17% to 1.25% on reports the finance ministry has agreed to give them an additional Rs 14,000 crore for selling fuel at government controlled prices in the year ended March 2010.

Inflation based on food prices rose 16.04% in the year through 24 April 2010, slower than previous week''s annual rise of 16.61%, the latest government data showed.

Rupee edged lower 17 paisa to Rs. 45.10 against one dollar.

Gainers & Losers

Atlanta Limited rose 1.6% to Rs 274.80 after the consortium of the company secured an order worth Rs 99.90 crore for widening and reconstruction of roads in Madhya Pradesh.

The Bank of Rajasthan Ltd fell 2.7% to Rs 87.00 after the bank initiated talks to buy a stake in Bank of Rajasthan from the Tayals, who control the small private-sector bank, the Economic Times reported on Thursday.

Dr. Reddy’s Laboratories Limited rose 0.2% to Rs 1,244.10 after the pharmaceutical company said fourth quarter sales rose 10% to Rs 1,152 crore from Rs 1,046 crore a year ago. Net profit for the quarter rose 62% to Rs 253 crore compared to net profit of Rs 156 crore a year ago.

Glenmark Pharmaceuticals Limited fell 0.6% to Rs 283.30 after the generics unit Thursday said it has entered into an exclusive license and supply agreement for a branded product with a unit of Taro Pharmaceutical Industries Ltd.

IRB Infrastructure Developers Ltd fell 1.1% to Rs 277.00 after the company emerged as the preferred bidder for a Rs 1,200 crore highway project in Karnataka.

Jaiprakash Associates Limited fell 0.5% to Rs 132.95 on bargain hunting after the stock declined 9.57% in the preceding four sessions.

Punjab National Bank rose 0.05% to Rs 1,043.80 after the bank said fourth quarter net interest income rose 31% to Rs 2,497.9 crore from Rs 1,906.5 crore a year ago. Net profit for the quarter rose 31% to Rs 1,135 crore compared to net profit of Rs 865.6 crore a year ago.

Mediaone Global Entertainment Limited added 4.9% to Rs 81.75 after the company said its board will meet on May 12 to consider bonus issue.

Provogue (India) Limited rose 2.3% to Rs 49.00 after the company''s real estate unit Prozone Enterprises planned to launch three residential projects in Indore, Nagpur and Coimbatore by the year-end.

United Breweries Limited fell 1.5% to Rs 200.00 after the manufacturer of beer said fourth quarter sales rose 23.5% to Rs 573 crore from Rs 464 crore a year ago. Net profit for the quarter fell 20.4% to Rs 26.2 crore compared to net profit of Rs 32.9 crore a year ago.

Union Bank of India fell 1.8% to Rs 296.50 after the bank said fourth quarter net interest income rose 50.7% to Rs 1,396.12 crore from Rs 926.38 crore a year ago. Net profit for the quarter rose 27.5% to Rs 593.5 crore compared to net profit of Rs 465 crore a year ago.