NTT DoCoMo Pays $2.7 B for Tata Tele

123jump.com Staff
12 Nov, 2008
New York City

Industrial production in India rises 4.8% in September. Stocks fall on political uncertainty as state wide polls draw near. Tata Teleservices sell 26% stake for $2.7 billion to NTT DoCoMo of Japan. Software exporters rose after the rupee declined to 48.84 to a dollar.

[R]1:00PM New York, 11:30 PM Mumbai - Industrial production rises 4.8% in September. Stocks fall on political uncertainty as state wide polls draw near. Tata Teleservices sell 26% stake for $2.7 billion to NTT DoCoMo of Japan.[/R]

Market Sentiment

Indian market averages fell in volatile trading on regional election results anxieties erased gains in the morning. Rise in industrial production lifted the sentiment in the morning but stocks fell sharply in the afternoon on the poll worries in five state wide elections.

In Mumbai, the BSE 30-share Sensex fell 3.1% or 303.36 to 9,536.33, and the CNX Nifty shed 3.1% or 90.20 to 2,848.45.

Of the stocks traded on the BSE 1,678 rose, 848 declined, and 74 were unchanged.

Trading Statistics

Daily turnover on the BSE fell to 3,680 crore rupees from 3,731.03 crore rupees yesterday.

Industrial Production Rises 4.8% in September

The Central Statistics Organisation reported today that the country’s index of industrial production advanced 4.8% to 273 in September from the same period a year ago and cumulative growth in April-September period increased to 4.9% from last year.

Production indexes that track activities in the mining, manufacturing and electricity sectors jumped 5.7% to 162.8, 4.8% to 294.4, and 4.4% to 219.3 respectively.

Nine of the 17 industry groups reflected positive growth in September from comparable period a year ago.

Transport equipment and parts industry climbed 16.8% followed by machinery and equipment other than transport equipment rose 16.1%.

Metal products and parts, excluding machinery and equipment increased 12.8%. Basic goods rose 4.6%, capital goods jumped 18.8% and intermediate goods slid 3.3% in the period.

Polls Uncertainties

Five states will go to the polls in the coming weeks. The polls will precede next year’s national election that will test the popularity of the current ruling party alliance.

Elections will be held in two phases on November 14 in Chhattisgarh, followed by Madhya Pradesh on November 25, while Delhi and Mizoram will go to the polls on November 29. Rajasthan elections are scheduled for December 4.

Results of these elections are expected on December 8.

Tata Teleservices Sell Stake to NTT DoCoMo

NTT DoCoMo Inc, the largest mobile carrier in Japan agreed to take a stake in Tata Teleservices Ltd. Japanese carrier will pay $2.7 billion for 26% stake in the fourth largest mobile carrier in India. Mobile subscriber base in India is growing at 50% a year and recently crossed 315 million, only second largest to China and larger than in the U.S.

NTT DoCoMo only five months ago agreed to pay $350 million or 30% stake in TM International Ltd. in Bangladesh.

Gainers & Losers

Jaiprakash Associates fell 9.1% to 77.10 rupees after foreign fund BSMA yesterday sold 1.97 crore shares at 87.25 rupees a share to Copthall Mauritius Investments.

Hindustan Unilever declined 4.9% to 234.60 rupees, Reliance Infrastructure plunged 4.4% to 553 rupees, and Larsen & Toubro slid 4.1% to 828.20 rupees.

Realty stocks slipped on the speculation that deteriorating conditions in the financial markets will increase borrowing costs. Unitech shed 3% to 49.50 rupees, DLF declined 8.3% to 245.50 rupees, and Indiabulls Real Estate lost 13.1% to 113.60 rupees.

Reliance Industries declined 3.6% to 1,164 rupees.

Financial stocks also declined. ICICI Bank tumbled 8.1% to 399 rupees, HDFC Bank dropped 0.9% to 1,014 rupees and State Bank of India fell 4.1% to 1,172.10 rupees.

Metal stocks fell. Sterlite Industries dipped 4.5% to 237.55 rupees, Hindalco Industries shed 5.6% to 56.65 rupees, and Tata Steel declined 2.4% to 186.30 rupees.

Automakers declined. Mahindra & Mahindra fell 4.3% to 342 rupees, Tata Motors shed 3.2% to 150.30 rupees, and Maruti Suzuki India climbed 1.1% to 566 rupees.

Oil and Natural Gas Corporation declined 3.3% to 711 rupees after the company announced yesterday that it will lose between 300 and 400 crore rupees annually if it follows the finance ministry directive to keep 60% of its surplus cash with state-run banks.

IT stocks rose after the rupee fell to 48.84 against the dollar. Wipro rose 0.9% to 250 rupees, Infosys increased 0.2% to 1,257.90 rupees and Satyam Computer Services declined 1.2% to 266 rupees.

Bharti Airtel dropped 3.7% to 633.50 rupees and Reliance Communications fell 1.1% to 218 rupees.

Tata Teleservices, a unit of Tata Teleservices, rose 8.3% to 18.10 rupees on the news that Japan’s NTT DoCoMo Inc, plans to buy a 26% stake in TTML''s parent firm Tata Teleservices for $2.7 billion.

Oil marketing firms fell after crude oil prices dropped below $60 per barrel. Bharat Petroleum Corporation increased 6.1% to 321.40 rupees, Indian Oil Corporation edged up 4.9% to 377 rupees, and Hindustan Petroleum Corporation soared 6.8% to 214 rupees.