Sensex Slips; RCom Acquires Digicable

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
02 Jul, 2010
New York City

Stocks in Mumbai traded lower. Reliance Communication acquires Digicable in all stock deal. Reliance Power gains after the U.S. based Exim Bank approve $600 million loan. Kesoram board approves $300 million expansion of its cement plant. Indraprastha Gas soars after raising PNG price.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded lower. Reliance Communication acquires Digicable in all stock deal. Reliance Power gains after the U.S. based Exim Bank approve $600 million loan. Kesoram board approves $300 million expansion of its cement plant. Indraprastha Gas soars after raising PNG price.[/R]

The Sensex index in India decreased 48.38 or 0.28% to 17,460.95 and CNX Nifty index rose 10.95 or 0.16% to 5,259.65. Among the Sensex 30 stocks, 21 rose and 9 fell.

On BSE trading, 1,684 stocks advanced, 1,124 declined and 109 were unchanged. Banking stocks rose.

Rupee edged lower 14 paisa to Rs. 46.53 against one dollar.

India, the world’s second-largest cotton grower and exporter, is likely to end restriction on exports amid forecasts of a record harvest this season, said a government official. India stopped registration for exports in April to cool domestic prices, and then introduced a new permit system for shipments in May.

“We will not have these restrictions in the next season. The limits applied in April were a temporary measure,” said A.B. Joshi, India’s Textile Commissioner in an interview in Mumbai yesterday.

The U.S. Export-Import Bank approved a loan for Reliance Power Ltd, to build a power plant in the central Indian state of Madhya Pradesh, according to a report by the Economic Times, citing a letter written by the bank’s Chairman Fred Hochberg.

The $600 million loan has been sanctioned on the condition that Reliance will invest the loan in renewable energy sector. An earlier request by the company for a loan to build a coal-fired power plant was rejected by the bank, the lender’s spokeswoman Stephanie O’Keefe said June 25.

Reliance Communications on Thursday announced the acquisition Digicable, the country’s largest cable TV service provider in an all stock deal. The board of RCom approved the proposal for the acquisition in a meeting held on Thursday, the company said in a statement, but did not disclose the value of the deal.

The new entity named Reliance DigiCom will integrate retail broadband operations with Digicable. The deal will create Asia’s largest and the world’s fifth-largest entity offering a full suite of Digital TV, high-speed broadband and voice services.

Nonagenarian industrialist B.K. Birla, Chairman of Kesoram Industries Ltd said on Thursday that the company’s board has approved an Rs 1,125 crore expansion plan that would increase the capacity of Kesoram cement business from 7.25 million tons to 9.25 million tons annually.

He said this after the ninety first annual shareholders meeting held in Kolkata yesterday.

ING Life Insurance is set to infuse a capital of Rs 240 crore this fiscal as part of its plan to achieve five-fold growth in business over the next five years, said CEO Kshitij Jain on Thursday in Bangalore.

“In the next five years, we hope to see 50% of revenues of ING Asia Pacific coming from India, which is now 20%, Jain told press persons while addressing them in Bangalore yesterday.

Gainers & Losers

Gillanders Arbuthnot & Company fell 4.2% to Rs 167.50 after the company postponed a board meeting for considering bonus issue to July 30, from earlier set date of July 15.

Glenmark Pharmaceuticals rose 1.4% to Rs 273.75 after the company''s unit got the U.S. drug regulator''s nod for adapalene gel used to treat acne.

Kesoram Industries rose 1% to Rs 308.20 after the company''s board approved investment of Rs 1,125 crore to raise its cement production capacity and set up a captive power plant.

Indraprastha Gas rose 7% to Rs 285.20 after the company on Thursday, July 1 raised the price of piped cooking gas by 93 paise to Rs 16.85 per unit.

Monnet Ispat & Energy Limited surged 16.0% to Rs 466.30 after the company said on Thursday it would pay Rs 275 crore ($59 million) for a 12.5% stake in power producer Monnet Power Company Ltd.

Oil and Natural Gas Corporation Limited rose 0.9% to Rs 1,314.90 after the recent government move to raise fuel prices and the state-run company’s plan to step up exploration.

Redington (India) rose 2.2% to Rs 368.20 after the company''s Singapore-based promoters sold close to 14% in the company to a group of foreign funds, including Goldman Sachs, Morgan Stanley and Blackstone, in Rs 391 crore deal.

Reliance Communications Limited rose 0.5% to Rs 193.35 after the company acquired cable television operator Digicable in an all-stock deal, according to a statement filed with the Bombay Stock Exchange.

Reliance Power gained 4.2% to Rs 176.70 after reports the Exim Bank agreed to provide $600 million loan guarantee to the company''s power project at Sasan in Madhya Pradesh.

Tata Motors Limited dropped 0.8% to Rs 772.00 after the company''s total vehicle sales jumped 49% to 67,730 from a year ago.

TRF rose 2.2% to Rs 832 after the company received an Rs 401.20 crore order from NTPC for erecting a coal handling plant that will cater to Vindhyachal Super Thermal Power Project.