Sensex Drops 1.3%; Exports Rise 36%

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

Stocks in Mumbai traded lower on euro-zone worries. Exports in April increased 36% to $16.9 billion. Mandhana Industries makes a lackluster debut. Bank of Rajasthan agreed to sell to ICICI Bank. Sanofi-Aventis and Pfizer are in talks to buy Piramal.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded lower on euro-zone worries. Exports in April increased 36% to $16.9 billion. Mandhana Industries makes a lackluster debut. Bank of Rajasthan agreed to sell to ICICI Bank. Sanofi-Aventis and Pfizer are in talks to buy Piramal.[/R]

The Sensex index in Mumbai fell 1.3% to its lowest level in more than two months after German regulator BaFin restricted short selling of government bonds till Match 31, 2011 in an effort to contain the euro-zone debt crisis.

Exports rose 36.2% in April to $16.9 billion from a year earlier, said Trade Secretary Rahul Khullar in New Delhi today.

ICICI Bank Ltd, India’s second-largest lender has agreed to buy Bank of Rajasthan Ltd, offering 25 shares for every 118 Bank of Rajasthan shares under an agreement, said the bank in a statement in Mumbai yesterday.

The deal worth as much as Rs 2,790 crore values Bank of Rajasthan at Rs 188.39 a share, 89% more than yesterday’s closing price. Bank of Rajasthan was fined by the Reserve Bank of India for violating rules earlier this year.

The Tayal family, Bank of Rajasthan’s largest shareholders are seeking to sell their stakes after India’s market regulator SEBI banned them on March 8 from trading in securities, citing improper stake disclosures.

Boards of both banks have met to give in-principle approval subject to due diligence and valuation by an independent valuer jointly appointed by both.

GEMAC Energy, part of GEMAC Group signed on Tuesday contracts to set up power plants in Gujarat.

The first agreement was signed with the UROK group, promoted by Rajkot-based NRI businessman Subhash Shihora to set up a 2 x 660 MW imported coal-based plant near Pipavav Port in the Saurashtra region for Rs 8,000 crore. Coal is to be imported from Indonesia.

The second agreement was signed with the Kaneria Group, promoted by Rajkot-based Anil Kaneria to set up a 2 x 225 MW gas-based project near Surat at a cost of Rs 2,000 crore. Gas for the project will be sourced from the KG-6 basin.

The Sensex index in India dropped 467.27 or 2.77% to 16,408.49 and CNX Nifty index fell 127.45 or 2.52% to 4,938.75. Among the Sensex 30 stocks, 2 rose and 28 fell.

On BSE trading, 776 stocks advanced, 1,957 declined and 85 were unchanged. Banking, IT, metal and realty stocks declined. Reliance Industries weakened.

Mandhana Industries was trading at Rs 133.85, a 3% premium over the initial public offer price of Rs 130.

Rupee edged lower 40 paisa to Rs. 45.99 against one dollar.

Gainers & Losers

The Bank of Rajasthan Ltd surged 20.0% to Rs 119.40 after the bank in its meeting on May 18 gave in- principle approval by majority, for an amalgamation with ICICI Bank subject to regulatory requirements.

Bodal Chemicals Ltd rose 4.9% to Rs 161.30 after the company fixed June 11 as the record date for a 5-for-1 stock split.

Bombay Rayon Fashions Limited fell 3.7% to Rs 196.70 after the manufacturer of fabrics and garments said fourth quarter sales rose 9% to Rs 474 crore from Rs 435.4 crore a year ago. Net profit for the quarter rose 43% to Rs 50.4 crore compared to net profit of Rs 35.2 crore a year ago.

Chennai Petroleum Corporation Limited fell 0.6% to Rs 251.80 after the refinery said fourth quarter sales rose 13.6% to Rs 5,465 crore from Rs 4,810 crore a year ago. Net loss for the quarter was Rs 60.1 crore compared to net profit of Rs 272 crore a year ago.

English Indian Clays Limited surged 11.6% to Rs 890.30 after the company’s board of directors recommended a final dividend at Rs 5 per share as well as issue of bonus shares in the ratio of 5 to 4.

Marsons Limited rose 3.4% to Rs 18.00 after the company secured an order of Rs 60 crore from Rajasthan Rajya Vidyut Prasaran Nigam for supply of power transformers.

Motherson Sumi Systems Ltd dropped 4.1% to Rs 131.15 after the manufacturer of wiring harnesses and components said fourth quarter sales rose 133% to Rs 1,928 crore from Rs 826.6 crore a year ago. Net profit for the quarter rose 84.5% to Rs 141.9 crore compared to net profit of Rs 76.9 crore a year ago.

Piramal Healthcare Limited rose 5.3% to Rs 571.00 after the local TV channels citing sources reported on Wednesday, that the French drugmaker Sanofi-Aventis and Pfizer Inc have started negotiations to acquire the firm.

Rural Electrification Corporation Limited slipped 4.0% to Rs 259.40 after the financial institution said fourth quarter sales rose 34.3% to Rs 1,796 crore from Rs 1,337 crore a year ago. Net profit for the quarter rose 44.6% to Rs 561 crore compared to net profit of Rs 388 crore a year ago.

Sagar Cements Limited fell 1.7% to Rs 174.10 after the company reported that net profit tumbled 96.4% to Rs 0.25 crore.