Broad Rally in India; Vedanta, Gujarat Deal

Chandrasekhar Atreya
06 Oct, 2010
New York City

In a broad rally, the benchmark index in Mumbai gained 0.7%. Vedanta secures enough bauxite form Gujarat for its refinery in Orissa. Handicrafts exports in August jumped 22%. Coal India public offering will not need anchor investor. India approves 10% disinvestment in Shipping Corp of India.

[R]5:00 PM Mumbai – In a broad rally, the benchmark index in Mumbai gained 0.7%. Vedanta secures enough bauxite form Gujarat for its refinery in Orissa. Handicrafts exports in August jumped 22%. Coal India public offering will not need anchor investor. India approves disinvestment of 10% stake in Shipping Corp of India.[/R]

Stocks in Mumbai traded higher tracking gains in international markets and ahead of earnings season. In a broad rally stocks traded higher across all sectors except capital goods.

The BSE Sensex Index added 0.7% or 135.37 to close at 20,543.08. The CNX Nifty on the National Stock Exchange gained 40.65 points to close at 6,186.45.

The rupee gained 8 paisa and closed at 44.60 to a dollar.

London-listed Vedanta Resources won the bauxite mining bid for Gujarat Mineral Development Corp and will get 500,000 tons of bauxite. Vedanta can now run its Orissa-based refinery to its full capacity.

Vedanta plans to ship Gujarat bauxite to Visakhapatnam via sea and then by road or rail to the refinery. The company requires a minimum of 60 lakh tons (or 6 million tons) of bauxite every year to run its refinery to full capacity.

Major Indian cities recorded an up to 10% rise in office rentals during the period July to September on increased demand from corporate businesses, according to a real estate agency consultancy firm.

“Over the past few months, there has been an improvement in commercial leasing activity, primarily due to the revival of expansion and consolidation plans by several companies,” CB Richard Ellis Managing Director Anshuman Magazine said in a release issued today.

India’s handicraft exports jumped 22% in August from a year earlier to $369 million thanks to an increased demand from U.S. and European markets.

According to the Export Promotion Council for Handicrafts, shipments stood at $303 million in August 2009.

About 1,000 Australian companies evince interest in doing projects in India every year despite the challenges of bureaucracy and delays as opportunities outnumber these impediments, a senior official of Australia said.

“Bureaucracy is a difficulty in India, delays too. But we look at the number of opportunities. Number of Australian companies that have evinced interest in India is increasing and there are 1,000 companies per year,” Senior Australian Trade and Investment Commissioner for South Asia, Peter Linford told the media on Tuesday.

Delhi-based Minda Corp, a privately held auto component company, acquired assets of German specialist component molding manufacturer Askys, the company said in a statement on Tuesday.

Askys has an annual turnover of 40 million euros and the acquisition will give Minda Corp access to assets worth 20 million euros.

JSL Stainless said Tuesday it has increased the proposed investment on phase-II development of its Orissa plant to Rs 6,400 crore to augment production capacity to 1 million tons per annum.

“As per revised financial closure for phase-II of the project, we are investing Rs 400 crore more in Orissa project to take the annual stainless steel output capacity to 1 million tons by 2012-13,” JSL Stainless Director, Arvind Parekh told media in New Delhi.

Indian government embarked Tuesday on a two-pronged strategy, allowing disinvestment of 10% of its stake in Shipping Corp of India and also allowing the company to raise 10% as additional equity.

The disinvestment in this company is expected to fetch the government Rs 1,300 crore.

India also decided that there will be no anchor investors for the initial public offer of Coal India Ltd which is due to open on October 18.

The Securities and Exchange Board of India on Tuesday streamlined the norms for charging of fees by portfolio managers, a move that will check the current practice of levying fees arbitrarily.

Gainers & Losers

Confidence Petroleum India Limited surged 4.4% to Rs 18.75 after the company’s board approved raising funds up to Rs 500 crore.

Career Point Infosystems Limited spurted 103.9% to Rs 632.35 after the tutorial services traded on BSE at 57.41% premium over its initial public offering price of Rs 310 per share.

Cox & Kings Ltd surged 3.7% to Rs 593.95 after central bank allowed additional buying by foreign investors in shares of the travel operator.

Eros International Media Limited soared 8.6% to Rs 190.05 after the entertainment firm traded on BSE at 8.51% premium over its initial public offer price of Rs 175 per share.

Elecon Engineering Company Limited increased 2.2% to Rs 91.60 after the handling equipment maker secured an order worth Rs 56.26 crore from Tecpro Systems for supply of material handling and other equipments.

EdServ Softsystems Limited declined 1.1% to Rs 236.50 after the education firm secured a five-year contract from the Gujarat state government for an undisclosed sum.

Hindustan Dorr-Oliver Limited surged 12.7% to Rs 145.45 after the engineering turnkey solution provider secured two orders aggregating Rs 96.57 crore.

ITI Limited gained 7.5% to Rs 45.55 after the telecom product firm said the government extended preferred vendor status to the state-owned telecom equipment manufacturer for next two years.

Indiabulls Financial Services Limited soared 6.7% to Rs 167.25 after a bulk trade of 3.4% stake traded on the BSE.

Kirloskar Brothers Limited rose 0.1% to Rs 254.50 after the centrifugal pump maker’s 13.51% equity changed hands in bulk deals on BSE.

Nagarjuna Construction Company Limited declined 2.2% to Rs 158.75 after the Income Tax department today conducted raids on the company''s offices in various states.

Nagarjuna Fertilizers and Chemicals Limited spurted 8.9% to Rs 33.55 after the government set up a committee to suggest freeing urea prices and inclusion of the fertilizer in the new nutrient-based subsidy regime.

OnMobile Global Limited gained 1.3% to Rs 381.05 and the company acquired a company in the U.S.

Reliance MediaWorks Limited soared 30.3% to Rs 278.90 after the theatrical film maker reported an overseas firm is picking up a stake in the company.

Shree Renuka Sugars Limited rose 0.3% to Rs 86.40 after the biofuel maker received a letter of intent for supply of 118 million litres of ethanol to the state-run oil marketing companies for a period of one year.

Sadbhav Engineering Limited fell 0.9% to Rs 1,532.50 after the company board approved a 10-for-1 stock split.

Tantia Constructions Limited increased 2.1% to Rs 93.90 after the company secured an order worth Rs 30.71 crore from the chief engineer, South Eastern Railway, Kolkata for construction of bridges.

Tata Motors Limited fell 0.2% to Rs 1,137.05 after the automobile maker’s American depository receipts gained 2.5% to $26.25 on the New York Stock Exchange on October 5.

The Shipping Corporation of India Limited surged 14.1% to Rs 191.85 after the government approved issue of fresh equity and part-disinvestment of its stake in the shipping company.

Western India Shipyard Limited surged 7.7% to Rs 14.83 after the ship and rig repairer secured an order worth Rs 72 crore from the defense ministry to repair a naval vessel.