Indian Cabinet Approves Stake Sale in Two Units

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
15 Jun, 2010
New York City

The Indian cabinet today approved sale of 10% stake in two state-owned units, Coal India Ltd and Hindustan Copper Ltd as part of it plan to disinvest stake in some 35 state-owned companies.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded higher led by Reliance Communications. Indian cabinet approves stake sale in two of its units. Balaji Telefilms firmly in the picture on news ADAG may buy stake. Sterlite Industries jumps 6%, two days ahead of record date for bonus and stock-split. Bharti Airtel adds 3 million mobile users in May.[/R]

The Sensex index in India increased 74.66 or 0.43% to 17,412.83 and CNX Nifty index rose 12.75 or 0.25% to 5,210.45. Among the Sensex 30 stocks, 17 rose and 13 fell.

On BSE trading, 1,573 stocks advanced, 1,231 declined and 111 were unchanged.

Seven sugar stocks rose 0.06% to 20% on reports the government has increased provisional levy on sugar prices for the ongoing October-September sugar season.

Rupee edged lower 8 paisa to Rs. 46.57 against one dollar.

The Indian cabinet today approved sale of 10% stake in two state-owned units, Coal India Ltd and Hindustan Copper Ltd as part of it plan to disinvest stake in some 35 state-owned companies.

“The government will sell 10% stake in the nation’s monopoly coal producer, Coal India Ltd and Kolkata-based Hindustan Copper Ltd,” Corporate Affairs Minister Salman Kurshid said over phone from New Delhi today, after the cabinet earlier approved the sale in a meeting.

These shares rose as much as 14% immediately after the announcement.

The Reserve Bank of India will take appropriate action to control inflation as prices are an area of concern, Finance Minister Pranab Mukherjee said in New Delhi today. The 10-year bonds of India pared gains after this statement and the yield on the 7.8% note due 2020 fell to 7.66% at 1:26 p.m. in Mumbai today according to the trading system of the central bank.

Reliance Communications Ltd, India’s second-largest wireless carrier, informed the media via an e-mailed statement today, that it is in advanced talks with local and overseas companies to de-merge Reliance Infratel Ltd, in a cash and stock transaction.

NTT Data Corporation, a Japan-based leading IT services company, has decided to buy the Hyderabad-based Intelligroup in an all cash tender offer pegged at $199 million. The companies have announced that they have entered into a definitive merger agreement.

The tender offer is scheduled to commence within six business days and will expire after 20 days unless it is extended.

Mahindra Navistar Automotives Ltd, a joint venture between Mahindra & Mahindra and Navistar of the U.S. on Monday announced the start of production at its Chakan facility with the roll out of the first truck offering, the 25-ton MN25 priced at Rs 14.99 lakh ex Pune.

India’s vegetable oils import declined in May as buyers consumed inventories. The imports fell for the fifth straight month in May.

Purchases declined 26% to 558,765 tons from 751,097 tons a year earlier, the Solvent Extractors Association of India said in a statement today from Mumbai. India buys palm oil from Indonesia and Malaysia and soybean oil from Brazil and Argentina.

Gainers & Losers

ABM Knowledgeware Limited surged 20.0% to Rs 53.40 after the company secured an order of Rs 60 crore.

Bajaj Hindusthan Ltd increased 3.0% to Rs 115.50 after the government raised the price paid to mills for refined sugar supply under a state program.

Balaji Telefilms Limited increased 2.1% to Rs 58.90 after Star India, which holds close to 26% stake in Balaji, decided to actively engage Balaji in its national and regional channels.

Bharti Airtel Limited fell 0.3% to Rs 269.00 after the mobile operator, added 3 million mobile subscribers in May, taking its total to 133.6 million, data from an industry body showed.

BOC India Limited surged 20.0% to Rs 287.45 after the company''s overseas parent said it plans to delist equity shares of BOC India from the stock exchanges in India.

Compucom Software Limited gained 6.7% to Rs 18.95, extending gains for the second consecutive day, after the company secured an order of Rs 77.77 crore.

Magma Fincorp Limited increased 3.6% to Rs 291.80 after the company''s board approved a 5-for-1 stock split.

MMTC Limited surged 23.5% to Rs 35,228.00 after the company said its board will consider bonus issue and stock split on June 29.

Hindustan Copper Limited increased 9.1% to Rs 514.20 after the Union Cabinet approved a 10% stake sale in the company.

Reliance Communications Limited added 3.3% to Rs 184.85 after the consortium of PE firm Blackstone and US-based tower company Crown Castle International, Manoj Tirodkar owned GTL, and independent tower company, American Towers, are in talks with Anil Ambani’s Reliance Communications for acquiring its tower unit through a demerger.

Sterlite Industries (India) Limited increased 3.6% to Rs 676.80, extending gains for the second consecutive day, after the company fixed June 22 as the record date for a 2-for-1 stock split and a liberal 1 to 1 bonus issue.

Tata Consultancy Services Limited dropped 1.7% to Rs 767.10 on turning ex-dividend for a total dividend of Rs 14 per share.