Sensex Gains; India Tax Reforms

Chandrasekhar Atreya
23 Jul, 2010
New York City

Stocks in Mumbai traded higher. RBI allows refinancing of the rupee loans. Finance Minister says the successful implementation of GST will boost India

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded higher. RBI allows refinancing of the rupee loans. Finance Minister says the successful implementation of GST will boost India’s economy to $2 trillion size. BHEL posts 41% rise in first quarter profit after tax.[/R]

Stocks in India fluctuated and closed higher in Mumbai today.

The Sensex index in India increased 17.83 or 0.10% to 18,130.98 and CNX Nifty index rose 10.50 or 0.19% to 5,452.45. Among the Sensex 30 stocks, 14 rose and 16 fell.

On BSE trading, 1,326 stocks advanced, 1,575 declined and 122 were unchanged.

Rupee edged higher 12 paisa to 47.00 against one dollar.

The Reserve Bank of India will permit financing through external commercial borrowings for refinancing rupee loans availed from domestic banks.

“According to the existing norms, refinancing of domestic rupee loans with external commercial borrowings is not permitted. However, keeping in view the special funding needs of the infrastructure sector, it has been decided to review the ECB policy and put in place a scheme of take-out finance,” the RBI said in a notification on Thursday.

The United Nations Conference on Trade and Development on Thursday said India would emerge as the third largest recipient of foreign direct investment for the three-year period ending 2012.

“If the situation continues to improve, India is likely to be amongst the most promising investor-home countries in 2010-12 as well as the third highest economy for FDI in 2010-12. In 2009, the country received FDI worth $34.6 billion, while the outward FDI was $14.9 billion,” UNCTAD says in its World Investment Report.

Brandhouse Oviesse, a joint venture between Brandhouse Retails of S. Kumar’s Nationwide Ltd and OVS Industry of Gruppo Coin of Italy, a leader in apparel retailing is planning to set up at least 190 stores in India in the next five years.

In an interview with The Hindu, Ashok Dalal, Managing Director and CEO of Brandhouse Oviesse said, two more stores are developed, one each in Bangalore and Delhi, apart from the only already in Chennai.

Finance Minister Pranab Mukherjee said the successful implementation of the goods and services tax (GST) can give a trillion dollar boost to the economy taking the total output to $2 trillion in a short span of time. ""The gain from GST will propel the country from a $1 trillion economy to $2 trillion in a short span of time,"" he said while addressing a meeting of the industry chamber FICCI.

Mukherjee, who had yesterday proposed a three-tier structure for the new indirect tax regime, quoting an NCAER estimate and said, ""well designed GST will see an increase of 2% to 2.5% in GDP.” GST will replace all the indirect levies like excise, VAT and local taxes etc.

Currently, the gross domestic product, which is the sum of total goods and services produced in a year, is over $1 trillion or Rs 58.9 lakh crore. The proposed GST, he told the industry captains, will provide a level playing field to domestic producers besides stimulating the economy by removing tax distortions and tax competitions. ""The successful implementation of GST will create win-win situations for centre-state, industry and consumers,” the minister added.

Gainers & Losers

Alstom Projects India Limited gained 6.0% to Rs 687.70 after the company said it secured two contracts for Rs.1,267.70 crore from Indian private utility GVK Industries to build two units at the new Jegurupadu-III combined cycle power plant in East Godavari Dist., Andhra Pradesh.

Allahabad Bank advanced 3.8% to Rs 185.00 after the lender’s first quarter net profit rose 14.6% to Rs 347.14 crore.

Bajaj Holdings & Investment Limited declined 2.3% to Rs 680.10 after the investment company reported first quarter net profit fell 12.6% to Rs 336.54 crore.

Bharat Heavy Electricals Limited rose 1.8% to Rs 2,450.10 after the energy infrastructure and engineering solutions provider’s net profit rose 41.8% to Rs.667.65 crore compared to net profit of Rs 470.6 crore a year ago.

Biocon Limited fell 1.9% to Rs 324.75 after the biopharmaceutical company’s first quarter net profit increased 33% to Rs 76.74 crore compared to net profit of Rs 57.55 crore a year ago.

Cairn India Limited advanced 2.4% to Rs 331.50 after crude oil prices surged nearly 4% on the New York Mercantile Exchange, on Thursday, July 22.

CRISIL Limited fell 2.9% to Rs 5,690.00 after the provider of ratings, research, risk and policy advisory services reported second quarter net profit fell 13% to Rs 33.31 crore.

FAG Bearings India Ltd surged 11.7% to Rs 760.05 after the ball/roller bearings and related components firm reported second quarter net profit increased 81.6% to Rs 33.84 crore.

Glenmark Pharmaceuticals Limited rose 0.1% to Rs 280.55 after the company said its unit has received final approval from the U.S. Food and Drug Administration to sell a generic version of Duramed Research Inc.''s Aygestin contraceptive tablets.

Halonix Limited rose 0.5% to Rs 91.30 after the manufacturer of compact fluorescent and halogen lamps said the acquisition of business and assets of its distributors is under way in Europe.

Indo Asian Fusegear Limited climbed 4.9% to Rs 108.75 after the company’s board approved sale of its switchgear business to French electrical equipment maker Legrand France SA for Rs 495 crore.

L.G. Balakrishnan & Bros Ltd added 2.1% to Rs 258.90 after the manufacturer of both automotive and industrial chains under the brand name ROLON reported first quarter net profit surged 87.6% to Rs 8.52 crore.

Riddhi Siddhi Gluco Biols Limited surged 20.0% to Rs 338.75 after the company reported first quarter net profit surged 506.4% to Rs 31.17 crore.

Shriram City Union Finance Limited rose 6.8% to Rs 534.00 after the asset financing company said it is in talks with Citibank India to buy Citi Financial India.

Steel Strips Wheels Limited added 0.7% to Rs 213.00 after the company said it has started exports to Germany''s BMW from its Chennai factory and will export 48,000 wheels annually for BMW''s ''Mini'' model.

UCO Bank gained 5.4% to Rs 91.10 after the bank reported first quarter net profit surged 45.4% to Rs 260.21 crore.

Wipro Limited decreased 0.2% to Rs 414.70 after the information technology solutions and services reported first quarter net profit rose 30.5% to Rs 1,318.60 crore.

Wockhardt Limited added 3.9% to Rs 145.25 after the pharmaceutical company received final approval from the U.S. regulators for marketing its 25 mg, 50 mg, 100 mg and 200 mg extended-release tablets of Metoprolol succinate which is used for 24-hour control of hypertension, treatment of angina and in improvement of survival after heart attack.