India Prepares Stake Sales of $10 Billion

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

Stocks in Mumbai traded marginally higher. India starts a legal process for advice on stake sale totaling $10 billion. Airlines rise on the speculation that foreign airlines maybe permitted to acquire stakes.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded marginally higher. India starts a legal process for advice on stake sale totaling $10 billion. Airlines rise on the speculation that foreign airlines maybe permitted to acquire stakes. Shree Renuka lowers the purchase price by 24% for Brazil based Equipav. Shoppers Stop soars nearly 10%.[/R]

Stocks in India gyrated and gained marginally after two stocks advanced for every stock that fell.

The Sensex Index rose by 0.04% or 6.25 to close at 17,755.94 and CNX Nifty index rose 10.95 or 0.1% to 5,327.50. Among the Sensex 30 stocks, 21 rose and 9 fell.

On BSE trading, 1,743 stocks advanced, 1,032 declined and 122 were unchanged. Realty, auto, consumer durables and steel stocks rose.

Three airline stocks rose 0.17% to 2.05% on reports the Prime Minister''s Office may permit foreign airlines to acquire stakes in Indian carriers along with a significant say in their management.

Five steel stocks rose 0.44% to 1.38% after the Chinese Ministry of Finance said it will scrap a tax rebate previously available on exports of a range of commodities, including various grades steel.

Rupee edged lower 49 paisa to Rs. 46.24 against one dollar.

India has initiated a tender process for legal advice on its scheduled asset sale program of Rs 40,000 crore. This will allow more law firms to participate in the tender, Disinvestment Secretary Sumit Bose said on June 18.

“We are drawing up a list of top law firms based on league tables and inviting them to tender,” Bose said.

Piramal Healthcare announced the signing of a definitive agreement to acquire Canada’s BioSyntech’s assets for a consideration of about Rs 17.65 crore.

BioSyntech is a medical device company specializing in the development, manufacturing, and commercialization of advanced biotherapeutic thermogels for tissue repair and therapeutic delivery.

Shree Renuka Sugars Ltd, India’s biggest refiner, will invest $250 million instead of the $329 million agreed in February, for Brazil’s Equipav SA Acucar e Alcool, the company said in its filing at the Bombay Stock Exchange today.

Equipav will give Shree Renuka 10.5 million tons of annual crushing capacity in Brazil, nearly half of its raw sugar requirement of 1.7 million tons, Gautam Watve, the company’s head of strategy and planning said in February.

Gainers & Losers

Bharti Airtel Limited rose 1.0% to Rs 264.75 after the company will spend $100 million over the next three years on network expansion in Malawi, Africa.

Hindustan Dorr-Oliver Limited increased 2.3% to Rs 124.00 after the company said that it inked a memorandum of understanding with SPIG Cooling Towers India (P) Ltd., a wholly owned subsidiary of SPIG S.p.A. of Italy.

Larsen & Toubro Limited dropped 3.0% to Rs 1,765.00 after the company has been disqualified on technical grounds in NTPC''s tender for 11 sets of supercritical boilers (and turbines) and the consequent re-tendering has invigorated other boiler manufacturers.

Murli Industries Limited added 2.7% to Rs 98.20 after at least four global cement companies are in the race to buy a little-known cement company in Maharashtra with a total capacity of 2.9 million tons.

Sterlite Industries (India) Limited fell 1.4% to Rs 176.20 after the company''s American depository receipt lost 3.28% to $15.03 on the New York Stock Exchange on Tuesday, June 22.

Shree Renuka Sugars Limited fell 0.5% to Rs 68.45 after the refiner will pay 24% less than agreed earlier for a controlling stake in Brazil’s Equipav SA Acucar e Alcool after prices of the commodity slumped from a 29-year high.

Shoppers Stop Limited surged 9.9% to Rs 524.95 after the retailer proposes to raise Rs 300 crore over the next two quarters, a top company official said.

Tata Motors Limited fell 2.1% to Rs 790.70 after the company said on Wednesday its board would meet on June 28 to consider various options to raise long-term capital.