Sensex Retreats; Maruti Net Drops 10%

Chandrasekhar Atreya
26 Jul, 2010
New York City

Stocks in Mumbai traded lower on weaker than expected earnings from Maruti. Monsoon gains momentum. SKS Microfinance lifted its price range for public offering. EIL declined 13% after the company priced secondary offering below current market price.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded lower on weaker than expected earnings from Maruti. Monsoon gains momentum. SKS Microfinance lifted its price range for public offering. EIL declined 13% after the company priced secondary offering below current market price.[/R]

Stocks in India fell for the first time in four days led by Maruti Suzuki Ltd after its net declined in the quarter ended June 30. The stocks in Mumbai started trading on a lower note and steadily declined.

The Sensex index in India decreased 110.93 or 0.61% to 18,020.05 and CNX Nifty index fell 23.55 or 0.43% to 5,425.55. Among the Sensex 30 stocks, 13 rose and 17 fell.

On BSE trading, 1,182 stocks advanced, 1,646 declined and 94 were unchanged.

Shares of a total of eleven banks fell 0.05% to 3.30% ahead of the central bank''s quarterly policy review tomorrow.

Rupee edged higher 3 paisa to Rs 46.90 against one dollar.

Monsoon rains have gained momentum over the weekend aiding the plantation of rice, cotton and soybean crops in India. Heavy rainfall in most parts of the country, for the past three days, have cut the deficit to 9% from the 16% in June, and the shortfall may narrow down to 4% to 5% by the end of the month if rains continue this week, said Ajit Tyagi, Director General of the India Meteorological Department.

JFE Steel of Japan has finalized an agreement to obtain approximately 14% of JSW Steel Ltd’s outstanding shares for around Rs 4,000 crore.

Japan’s second-biggest steelmaker JEE Holdings Inc has finalized an agreement to invest around $1 billion in India’s JSW Steel Ltd, by buying securities convertible into shares at a minimum price of Rs 1,300 each, says reports. Post-conversion JFE will hold a little less than 15% stake of JSW.

JFE Steel, the main steelmaking unit of JFE Holdings and JSW, third largest steel producer in India agreed in November on an alliance that included the two companies taking stakes in each other.

Malaysia’s sovereign wealth fund Khazanah Nasional Bhd, agreed to pay S$ 2.6 billion for the rest of Singapore’s Parkway Holdings Ltd, topping the earlier offer made by Fortis Healthcare Ltd.

Khazanah offered S$3.95 a share in cash for the portion of assets it doesn’t own already in Parkway, the Kuala Lumpur-based fund said in a statement today. That offer is 3.9% more than the offer of S$3.80 made by Fortis.

Hyderabad-based SKS Microfinance Ltd, the Indian lender backed by Sequoia Capital increased its offer price and raise as much as Rs 1,630 crore after having six quarters of gains.

Shares in the IPO will be offered between Rs 850 and Rs 985 per share with a discount of Rs 50 for retail buyers from July 28. Kotak Mahindra Capital Co, Citigroup Inc and Credit Suisse Group AG will be managing the issue.

India is seeking to raise as much as Rs 960 crore from the stake in sale state controlled Engineers India Ltd as part of its proposed sale of assets in state-run companies.

The government will commence offering from tomorrow with the price range between Rs 270 to Rs 290 per share, with a discount of Rs 50 per share for employees, and retail buyers, according to an advertisement in the Financial Express newspaper today. ICICI Securities Ltd, HSBC Securities & Capital Markets (India) Pvt Ltd, IDFC Capital Ltd and SBI Capital Markets Ltd are managing the sale.

Gurgaon-based Maruti Suzuki Ltd, India’s biggest carmaker, fell the most in a year, after first quarter net income declined unexpectedly.

Maruti posted a 20% decline in profit, its first decline in five quarters, as it paid additional royalties to Suzuki and the depreciation of the euro against the rupee hurt export income. Net income in the quarter fell to Rs 584 crore, the company said July 24.

Gainers & Losers

Areva T&D India Limited fell 1.4% to Rs 289.55 after the business of transmission and distribution of energy reported second quarter net profit fell 35.7% to Rs 32.24 crore.

Bharat Forge Limited fell 0.05% to Rs 331.30 after the company reported first quarter net profit surged 6090.6% to Rs 59.43 crore compared to net profit of Rs 0.96 crore a year ago.

Brigade Enterprises Limited added 1.4% to Rs 137.70 after the real estate developer reported first quarter net profit surged 260.6% to Rs 13.92 crore.

Century Textiles and Industries Limited decreased 1.8% to Rs 452 after the company reported first quarter net profit declined 29% to Rs 100 crore compared to net profit of Rs 142 crore a year ago.

DCM Shriram Industries Limited fell 1.7% to Rs 92.50 after company reported first quarter net loss of Rs 29.3 crore compared to net profit of Rs 21 crore a year ago.

Eicher Motors Limited added 2.6% to Rs 992.10 after the business of automobile products and related components reported second quarter net profit rose 165.2% to Rs 83.0 crore compared to net profit of Rs 31.3 crore a year ago.

EIH rose 1.8% to Rs 130 after the company''s promoters are likely to increase stake in the company to protect it against a possible takeover bid.

Engineers India Limited dropped 7.1% to Rs 313.40 after the government set the price band of the company''s follow-on public offer at Rs 270 to 290, lower than the current market price.

Fortis Healthcare Limited rose 4.4% to Rs 158.60 after the healthcare provider said the Malaysian sovereign fund Khazanah offered to buy all outstanding shares of Singapore''s Parkway Holdings valuing it at $3.3 billion, sources with knowledge of the deal said.

Gateway Distriparks Ltd declined 2.8% to Rs 112.45 after the container and logistics company said today that it would raise long-term resources to expand and develop its existing businesses, including those of its subsidiaries by issue of additional equity shares for an amount not exceeding Rs. 250 crore.

IL&FS Transportation Networks declined 1.3% to Rs 298 after the stock turned ex-dividend today, July 26 for a dividend of Rs 3 per share for the year ended March 2010.

Jaiprakash Associates Limited dropped 4.6% to Rs 122.60 after the diversified infrastructural industrial conglomerate first quarter June 2010 earnings failed to meet market expectations.

Jet Airways (India) Limited added 0.6% to Rs 618.00 after the airline expects occupancy on international routes to improve in the second quarter ending Sept. 30, Saroj Datta, executive director said in a conference call with analysts.

Lakshmi Machine Works Limited advanced 3.5% to Rs 2,057.80 after the company said its board will meet on July 28 to consider buyback of its own shares.

Kabra Extrusion Technik Limited surged 11.0% to Rs 199.95 after the company''s board recommended 1-to-1 bonus issue at the time of announcing its first quarter results today, July 26.

Kesoram Industries Limited fell 2.3% to Rs 293.85 after the company reported first quarter net profit plunged 63.5% to Rs 35.62 crore.

Maruti Suzuki India Limited plunged 10.4% to Rs 1,216.95 after the carmaker reported first quarter net profit declined 20.2% to Rs 465.40 crore.

Sterlite Industries (India) Limited rose 0.2% to Rs 174.15 after the non-ferrous metals and mining company reported first quarter net profit increased 50% to Rs 1,008 crore compared to net profit of Rs 672 crore a year ago.

Tata Sponge Iron Limited rose 0.8% to Rs 328.75 after the production of sponge iron reported first quarter net profit surged 59.4% to Rs 25.90 crore.

United Phosphorus Limited fell 1.3% to Rs 178.10 after the specialty chemicals reported first quarter net profit fell 19.2% to Rs 142 crore compared to Rs 176 crore a year ago.