Rupee Advances; India Stocks Fall

Chandrasekhar Atreya
29 Sep, 2010
New York City

Stocks in Mumbai traded lower after the rupee surged to new high for the year and a regional court ordered the closure of copper plant run by Sterlite Industries. The debt heavy ADAG business group looks to raise funds through public offering and stake sale. ADB lifts India growth target to 8.5%.

[R]5:00 PM Mumbai – Stocks in Mumbai traded lower after the rupee surged to new high for the year and a regional court ordered the closure of copper plant run by Sterlite Industries. The debt heavy ADAG business group looks to raise funds through public offering and stake sale. Asian Development Bank lifts India growth target to 8.5%.[/R]

Stocks in India dropped for a second day led by Sterlite Industries (India) Ltd after a court ordered its only smelter plant to be closed for breaching environmental regulations.

The BSE Sensex lost 0.74% or 148.52 to close at 19,956.34. The CNX Nifty Index on the National Stock Exchange lost 0.7% to close below 6,000 at 5,984.60.

The rupee climbed to its highest in more than four-and-half months on Wednesday on sustained foreign investments and the dollar’s weakness. The rupee closed at 44.98 to a dollar.

The rupee traded at 44.85 to a dollar, strongest since May 10 and 0.4% above Tuesday’s close of Rs 45.15 per dollar.

Vedanta-owned Sterlite Industries closed its Tuticorin copper smelter in Tamil Nadu after a court order, sending its shares down 8%. The plant produced 334,302 tons of copper cathodes in the year to March 2010, according to government data.

A Chennai High Court order said that the unit’s activities would result in a rise in pollution levels and affect workers at the copper smelting plant at Tuticorin.

Anil Ambani, the Chairman of the ADA Group, on Tuesday promised shareholders an improved performance from his group companies as he unveiled plans to cut debt, expand capacity and issue bonus shares in Reliance Capital, the group’s financing arm.

Reliance Communications said Tuesday it may sell 26% stake in the company, and also list its telecom tower subsidiary Reliance Infratel, to become debt free.

“We are considering options to raise equity resources in both RCom and our tower subsidiary, Reliance Infratel. We also have a possibility, if considered appropriate, of combining such a transaction with a possible IPO, for our tower business,” ADAG Chairman Anil Ambani said at the company’s sixth AGM in Mumbai.

In a slew of announcements one after another, Anil Ambani on Wednesday outlined investments of nearly Rs 125,000 crore and also fund raising of over Rs 65,000 crore.

Infrastructure lender IDFC, which is raising Rs 3,400 crore via public bond issue, may also tap the overseas market for raising additional Rs 3,000 crore, a top company official said Tuesday.

“We have the scope of raising Rs 3,000 crore through external commercial borrowings in the current fiscal. We will come up with the issue in due course,” the company’s CEO and MD Rajiv Lall told reporters in New Delhi.

China telecom is in talks with several Indian operators over a cable connection between the two countries, while also eyeing possible overseas acquisitions, a report said Wednesday.

China’s largest fixed-line operator is in talks with Bharti Airtel, Reliance Communications and Tata Communications over an above-ground cable connection liking the two Asian giants, the Wall Street Journal reported, quoting Deng Xiao Feng, Chairman of the firm’s international arm.

India is looking at investing about $20.8 billion in 276 projects which are part of the government’s endeavor to expand 13 major ports in the country, Shipping Minister, G.K. Vasan told reporters in Singapore Wednesday.

Addressing an “Indian Port and Maritime Seminar” Vasan said 22 projects are ready for bids as the country is pressing on increasing the capacity of ports, mostly through public and private sector participation.

Indian Navy plans to acquire at an estimated cost of Rs 300 crore its second floating dock which will be stationed at the strategically key Andaman and Nicobar Islands.

Manila-based Asian Development Bank raised India’s growth forecast for the current fiscal year to 8.5% from 8.2% after a series of positive numbers from industrial and agriculture sectors. For the next financial year, ADB has retained its earlier projection of 8.7% expansion in GDP.

The World Bank is exploring whether to invest in an $11 billion debt fund the Indian government will roll out next year to improve its infrastructure sector, the Bank’s India head said in New Delhi today.

Gainers & Losers

AREVA T&D India Limited fell 0.2% to Rs 291.10 after the energy transmission company won an order worth Rs 150 crore from Indiabulls Power for supply of power transformer package for its upcoming power projects at Nasik & Amravati districts of Maharashtra.

Diamond Power Infrastructure Limited soared 4.4% to Rs 247.85 after the power transmission equipment and turnkey service provider said its state-of-the-art transmission tower facility at Vadodara commenced trial production.

eClerx Services Limited surged 4.4% to Rs 529.80 on a broker recommendation.

Force Motors Limited plunged 3.6% to Rs 726.00 after the automobile company stock soared 25.52% in the preceding two trading sessions.

Glenmark Pharmaceuticals Limited declined 3% to Rs 295.25 on profit booking after the stock rose 7.7% in the preceding three sessions.

Harrisons Malayalam Limited slipped 2.5% to Rs 89.70 after the rubber, tea and pineapple firm turned ex-dividend September 29 for dividend of Rs 2 per share for the year ended March.

Hindustan Petroleum Corporation Limited fell 3.1% to Rs 520.10 after the oil refining reports the government plans to limit its share of fuel subsidy payout to last year''s levels despite higher losses suffered by oil marketing companies this year.

Indosolar Limited decreased 5.3% to Rs 23.70 after the photovoltaic cell maker traded at a discount to the initial public offer price of Rs 29.

Koutons Retail India Limited plunged 19.9% to Rs 215.85 after the credit rating agency ICRA suspended its ""LB+/A4"" ratings assigned to Rs 300 crore-debt.

Marsons Limited spurted 6.6% to Rs 18.40 after the power transformers firm secured an export order worth $20 million from Federal Republic of Nigeria for supply of medium power transformer.

Nelcast Limited surged 19.9% to Rs 95.90 after the iron casting maker entered into an agreement to sell its investment held in Nelcast Energy Corporation.

Nectar Lifesciences Limited rose 1.7% to Rs 32.60 after the pharmaceutical firm got certificate of suitability from the European drug regulator for Cefuroxime Axetil.

Provogue (India) Limited gained 4.4% to Rs 65.10 after the fashion apparel director Akhil Chaturvedi told the media that he expects revenue growth between 35% and 40% in second quarter September.

Power Grid Corporation of India Limited rise 1.7% to Rs 108.65 after chief executive S.K. Chaturvedi told the media that the company will launch its Rs 8,600 crore follow-on public offer by the second week of November.

Somany Ceramics Limited gained 0.02% to Rs 257.95 ceramic tile maker said its board will meet on October 1 to consider stock-split.

Sterlite Industries (India) Limited slipped 8.5% to Rs 161.50 non-ferrous metals and mining said Madras High Court ordered closure of the company''s copper smelting plant at Tuticorin after noting that the company has failed to comply with environmental issues.

Sun Pharmaceutical Industries Ltd. increased 1.7% to Rs 2,002.15 pharmaceutical firm received tentative approval from US drug regulator to market Riluzole hydrochloride tablets in 50 milligram strength.

The Supreme Industries Limited spurted 7.7% to Rs 752.30 after the plastic product maker fixed October 19 as the record date for a 5-for-1 stock split.

Tantia Constructions Limited increased 3.2% to Rs 92.75 after the civil infrastructure firm in consortium with Senbo Engineering secured an order worth Rs 179.94 core from Rail Vikas Nigam.

Vascon Engineers Limited declined 2.4% to Rs 166.95 after the construction company signed an agreement with Bhalakh Realtors to develop a 105 acre township at Oragadam, a suburb of Chennai.