Indexes in India Weak; SBI Net Drops 32%

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

India plans debt fund for infrastructure development. OVL inks agreement with Venezuela for oil exploration. Aban Offshore falls as Venezuela says Rig-Sinking is being probed. State Bank of India said fourth quarter net declined 32%.

[R]6:00 PM Mumbai, 8:30 AM New York – India plans debt fund for infrastructure development. OVL inks agreement with Venezuela for oil exploration. Aban Offshore falls as Venezuela says Rig-Sinking is being probed. State Bank of India said fourth quarter net declined 32%.[/R]

The benchmark Sensex index declined on a weakness in Tata Steel Ltd on continued global economic worries.

The annual rate of inflation measured in wholesale price index increased to 9.59% in April compared to 1.31% a year ago. The index increased 1.2% to 253.7 from 250.8 in March, according to the latest data released by the statistics bureau.

India is planning to set up a Rs 50,000 crore debt fund to build ports, roads, and bridges needed as part of infrastructure development to boost economic growth, according to Montek Singh Ahluwalia, Planning Commission Chairman.

India spent only 6.5% of its GDP on infrastructure in 2009 compared to about 11% of GDP by China according to a report by Ernst & Young.

In a big-ticket investment aimed at giving a boost to its oil and gas assets outside India, the Oil and Natural Gas Corporation Videsh Ltd, along with its partners signed an agreement with the Venezuelan government on Thursday to develop a $20 billion oil project in the Orinoco region.

The project is expected to give India 3.6 million tons of crude a year.

Investigations were started in Venezuela as Aban Offshore Ltd’s natural gas platform leased to the state-owned Petroleos de Venezuela SA, sank yesterday. PDVSA said a failure in the floatation system caused the rig to sink after a massive inflow of water. All the 95 workers at site were evacuated safely.

Venezuela has Latin America’s largest natural gas reserves at 170 trillion cubic feet of gas.

UK-based Standard Chartered plans its initial share sale in Indian markets between May 25 and 28 to raise $750 million becoming the first foreign entity to list shares on Indian domestic bourses.

The bank plans to sell 240 million shares, or Indian Depository Receipts with every 10 IDR representing one share of Standard Chartered.

‘The IDR issue is a strategic move to reinforce our commitment in allowing Indian investors direct access to our performance’, Standard Chartered Group Chief Executive Peter Sands told reporters in Mumbai on Thursday.

The provisional winning price for pan-India spectrum crossed the Rs 15,000 crore after 162 rounds in the e-auction of 3G Spectrum on Thursday. Current auction level assures that the Indian government will collect over Rs 60,000 crore.

The Sensex index in India decreased 271.27 or 1.57% to 16,994.60 and CNX Nifty index fell 30.96 or 0.6% to 5,148. Among the Sensex 30 stocks, 7 rose and 23 fell.

On BSE trading, 1,004 stocks advanced, 1,778 declined and 100 were unchanged. Metal stocks also fell as copper futures dropped. Reliance Industries declined. Realty stocks fell on worries the central bank may hike rates to tame inflation.

Eight metal shares fell 0.56% to 4.73% as global metals prices declined on fears euro zone debt problems and China''s efforts to cool its economy will crimp demand.

Gainers & Losers

Aban Offshore Limited plunged 16.4% to Rs 850.00 after the shares fell the most in 18 months in Mumbai as investigations started in Venezuela into the sinking of a natural-gas platform leased by a unit to state-owned Petroleos de Venezuela SA.

Adani Enterprises Limited rose 2.2% to Rs 596.50 after the diversified and dynamic business group said fourth quarter sales fell 9.5% to Rs 7,824.5 crore from Rs 8,654 crore a year ago. Net profit for the quarter rose 105% to Rs 339.8 crore compared to net profit of Rs 166 crore a year ago.

Alok Industries Limited climbed 3.5% to Rs 20.55 after 1.34% equity changed hands in four bulk deals.

Cairn India Limited decreased 2.7% to Rs 293.80 after crude oil prices declined nearly 2% on the New York Mercantile exchange on Thursday, May 13.

Crompton Greaves Limited rose 0.5% to Rs 250.35 after the manufacturer of electrical products said fourth quarter sales rose 2% to Rs 2,508 crore from Rs 2,460 crore a year ago. Net profit for the quarter rose 58% to Rs 307 crore compared to net profit of Rs 194 crore a year ago.

The Federal Bank Limited fell 1.6% to Rs 280.65 after the bank said fourth quarter net interest income rose 27.6% to Rs 409.7 crore from Rs 320.9 crore a year ago. Net profit for the quarter rose 2% to Rs 116.8 crore compared to net profit of Rs 114.2 crore a year ago.

Mahanagar Telephone Nigam Limited fell 2.1% to Rs 64.40 after the provider of telecommunications services said fourth quarter sales fell 20.6% to Rs 848.3 crore from Rs 1,068.7 crore a year ago. Net loss for the quarter was Rs 1,573.7 crore or Rs 24.98 per share compared to net loss of Rs 730 crore or Rs 1.16 per share a year ago.

Plethico Pharmaceuticals Limited gained 5.2% to Rs 383.90 after the company reported first quarter consolidated net profit jumped 343.3% to Rs 71.10 crore.

Dr. Reddy’s Laboratories Limited rose 2.7% to Rs 1,306.95 after the company received approval from US regulator Food & Drug Administration to market Tacrolimus capsules in multiple strengths.

State Bank of India dropped 4.0% to Rs 2,222.65 after the bank said fourth quarter net interest income rose 39% to Rs 6,721.4 crore from Rs 4,841.9 crore a year ago. Net profit for the quarter fell 32% to Rs 1,867 crore compared to net profit of Rs 2,742 crore a year ago.

Zensar Technologies Limited increased 2.6% to Rs 328.70 after the IT services firm said on Thursday it secured a 5-year contract worth 1 billion rupees from an insurance firm in South Africa.