Sensex Soars 2.4%; Coal India Offering Gains Momentum

Chandrasekhar Atreya
13 Oct, 2010
New York City

Stocks in Mumbai surged after foreign investors continued to increase stakes and the strength in the international markets. Coal India Ltd expects to raise as much as $3.8 billion in a public offering on strong demand form global investors.

[R]5:00 PM Mumbai – Stocks in Mumbai surged after foreign investors continued to increase stakes and the strength in the international markets. Coal India Ltd expects to raise as much as $3.8 billion in a public offering on strong demand form global investors.[/R]

Indian shares extended the gains to 2% on strong foreign fund investment together with a positive market breadth.

The BSE Sensex rose as much as 2.4% or 484.54 to close at 20,687.88. The CNX Nifty on the National Stock Exchange gained 143 points to close at 6,233.90, on strong global cues.

State-run Coal India fixed the price band of its initial public offering at Rs 225 to Rs 245 per share. Retail investors and Coal India employees will be able to participate at 5% discount. The company is expected to sell 10% stake at Rs 15,000 crore.

Adani Group entered into discussions with state-owned Coal India Ltd to jointly develop mines in Australia, which it bought recently for around Rs 12,600 crore.

Infrastructure firm, VA Tech Wabag after listing the company on the NSE said that it plans to acquire companies across geographies it is operating in today.

“We are open to acquisitions in any of our target markets. However, we don’t have a particular preference for any geography. We are a global company and as long as they are in the geographical area where company is concentrating, we can look at them,” Managing Director, Rajiv Mittal told reporters at the NSE after the company’s listing.

The rupee continued to trade stronger in trade tracking gains in domestic shares and boosted by the dollar’s weakness versus major currencies.

The rupee was trading at Rs 44.45 to a dollar at 2:05 p.m., stronger than the 44.66 close on Tuesday and closed at Rs 44.62, up 22 paisa.

Coal India Ltd that plans to raise up to $3.5 billion through an IPO, has set aside $1.2 billion for overseas acquisitions in this fiscal year, Chairman Partha Bhattacharya said on Wednesday.

The Reserve Bank of India today rejected a proposal by the Department of Industrial Policy and Promotion to allow optionally convertible debentures or preference shares as part of foreign direct investment. These instruments where pricing is decided on a future date protect investors from upward or downward risks and therefore should be treated as debt rather than equity, the central bank said.


Gainers & Losers

Birla Shloka Edutech spurted 19.9% to Rs 35.15 and locked at upper circuit limit of 20% after the company''s board allotted 19.94 lakh convertible equity share warrants to promoters of the company at Rs 68 each.

Castrol India Limited fell 0.6% to Rs 498.30 after the lubricant oil maker third quarter net profit rose 22.3% to Rs 116.90 crore.

Elecon Engineering Company Limited soared 6.8% to Rs 99.90 after the material handling equipment maker secured an order worth Rs 21 crore from Wonder Cement, Udaipur.

Easun Reyrolle Ltd. gained 1.6% to Rs 132.65 after the power automation company''s board approved issue of two million warrants convertible into equity shares to the promoters on preferential basis.

Goa Carbon Ltd declined 4% to Rs 107.30 on profit booking after the stock rose 8.38% in the preceding three sessions.

Gangotri Iron & Steel Company Limited rose 0.8% to Rs 80.80 after the Steel, Sponge & Pig Iron maker fixed 1 November as record date for a 2-for-1 stock split.

Hindalco Industries Limited gained 2.6% to Rs 216.30 after the aluminum and copper maker gained 0.86% to $3,845.90 on October 12.

JSW Steel Limited increased 1.6% to Rs 1,348.20 after the iron and steel maker considering its overseas coal and iron ore assets into a unit for a share sale to fund expansion.

Magma Fincorp Limited rose 1.1% to Rs 81.95 after the auto finance company said second quarter consolidated net profit rose 67.2% to Rs 25.85 crore.

Mahindra & Mahindra Limited gained 2.7% to Rs 735.70 after the trade and logistics Vice-Chairman Anand Mahindra told the firm expects to sign a final agreement to buy South Korea''s Ssangyong Motor Co by December as it starts pricing negotiations.

Mahanagar Telephone Nigam Limited increased 2.5% to Rs 69.20 after its American depository receipts surged 3.46% to $2.99 on New York Stock Exchange on October 12.

Oracle Financial Services Software Limited surged 4.6% to Rs 2,455.30 after the information technology provider was boosted by an upbeat fourth-quarter earnings forecast from U.S. technology firm Intel.

Riddhi Siddhi Gluco Biols Limited fell 0.4% to Rs 493.60 after the corn starch company said second quarter net profit soared 168.85% to Rs 24.60 crore.

State Bank of Bikaner and Jaipur surged 5.7% to Rs 756.15 after the bank said board will consider rights issue on October 18.

Surya Pharmaceutical Limited gained 1.4% to Rs 274.50 after the active pharmaceutical company said it raised $25 million from an issue of global depository receipts.

The Shipping Corporation of India Limited fell 0.2% to Rs 187.30 after the shipping company filed an application for its follow-on public offer with the stock market regulator Securities & Exchange Board of India.

Tata Metaliks Limited plunged 3.9% to Rs 149.10 after the pig iron maker reported second quarter consolidated net loss of Rs 0.41 crore compared to net profit of Rs 10.65 crore from a year ago.

Uflex Limited spurted 9.8% to Rs 289.75 after the plastic and metalized film maker said board will meet on October 13 to review the status of rights issue and to discuss other matters.

VA Tech Wabag Limited has traded at Rs 1,669.85 at a 27.47% premium over the initial public offering price of Rs 1310.