L&T Finance IPO
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Wednesday, July 27, 2011
Is the telecom tariff party over?
via Business Standard
Well, for Bharti Airtel subscribers, it definitely is over. Last week, the country’s largest mobile operator hiked its mobile tariffs on some plans by 20 per cent across six circles which constitute over 37 per cent of its wireless revenues. This includes pre-paid calls on both their network as well as calls to phones on other ones.
It is not as if the tariff hike has taken the industry completely by surprise. Most telecom watchers say that they were expecting operators confronted with squeezed margins and high debt to pull the rug sometime soon. The signs were already there. First, the relentless fall in tariffs kick-started by new operators last year in order to acquire new subscribers bottomed out. Then, just a few weeks ago, Tata DoCoMo made a tentative move by doubling its own-net tariffs in its GSM service in Tamil Nadu and stealthily followed it up in six more circles (own-net calls of 1 paisa for six seconds were made for three seconds).
Coal India jumps on overseas mine acquisition buzz
Coal India galloped 6.55% at Rs 398.50 on BSE, extending Tuesday's 1.31% gain triggered by reports the state-owned monopoly coal producer is seeking the government's approval to acquire 30% stake in a coal asset in Indonesia.
Meanwhile, the BSE Sensex was provisionally down 93.57 points, or 0.51%, to 18,424.65
On BSE, 24.67 lakh shares were traded in the counter as against an average daily volume of 9.54 lakh shares in the past one quarter.
L&T Finance Holdings IPO subscribed 46% on day one
Gets bids for 9.82 crore shares
The initial public offer (IPO) of L&T Finance Holdings was subscribed 46% on the first day of the issue today, 27 July 2011. The IPO received bids for 9.82 crore shares, compared with 21.45 crore shares on offer.
The price band for the IPO is Rs 51 to Rs 59 per share. The issue closes on Friday, 29 July 2011.
BSE Bulk Deals to Watch - July 27 2011
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
27/7/2011 590006 Amrutanjan Health-$ CROSSEAS CAPITAL SERVICES PRIVATE LIMITED B 26867 951.46
27/7/2011 590006 Amrutanjan Health-$ A K G SECURITIES AND CONSULTANCY LTD B 41741 952.05
27/7/2011 590006 Amrutanjan Health-$ R M SHARES TRADING PRIVATE LIMITED B 17976 944.69
NSE Bulk Deals to Watch - July 27 2011
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
27-JUL-2011,AMRUTANJAN,Amrutajan Health Ltd,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,27001,951.65,-
27-JUL-2011,AMRUTANJAN,Amrutajan Health Ltd,R.M. SHARE TRADING PVT LTD,BUY,17951,946.64,-
27-JUL-2011,ATLASCYCLE,Atlas Cycles (Haryana) Lt,AJAY ASSET MANAGEMENT PRIVATE LIMITED,BUY,25991,452.32,-
27-JUL-2011,ATLASCYCLE,Atlas Cycles (Haryana) Lt,ASHWIN STOCKS AND INVESTMENT PRIVATE LIMITED,BUY,104844,453.23,-
Markets end lower for 2nd day
Weakness in the global stocks and RBI’s aggressive rate hike weighed on the sentiments today. The Sensex declined 86 points and the Nifty fell 28 points.
Major headlines
IDFC Q1 consolidated net profit declines by 6%
HCL Technologies FY11 consolidated net profit soars 31%
Lupin Q1 consolidated bottomline up 7%
RIL, Bhel extend losses after disappointing Q1 results
Fears that higher interest rates will hurt corporate profit growth pulled the market lower for the second straight day. The barometer index BSE Sensex reached its lowest closing level in more than two weeks. The Sensex shed 85.97 points or 0.46%, up close to 73 points from the day's low and off about 146 points from the day's high. The market breadth, indicating the overall health of the market, was negative. The Reserve Bank of India (RBI) on Tuesday, 26 July 2011, hiked its key lending rate by a steeper-than expected 50 basis points to tame inflation at a policy review, which had triggered a sell-off in stocks on that day.
The market may remain volatile tomorrow, 28 July 2011, as traders roll over positions in the derivatives segment from the near-month July 2011 series to August 2011 series ahead of the expiry of July 2011 derivatives contracts on Thursday, 28 July 2011.
L&T Finance Grey Market Premiums
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Vaswani Ind. | 49 | 1.50 to 2 |
| Bharatiya Global | 82 | 1.25 to 1.75 |
| Inventure Growth | 117 | 4 to 4.50 |
| L & T Finance | 51 to 59 | 6 to 6.50 |
Daily News Roundup - July 27 2011
Comptroller and Auditor General of India rejected Reliance Industries’ claim that it was not given enough time to respond to observations relating to its KG-D6 gas field. (ET)
Hindustan Petroleum Corporation is planning to raise US$300mn in the second half of the current fiscal and has appointed Bank of Tokyo-Mitsubishi, State Bank of India and Sumitomo Mitsui Banking as advisors. (ET)
Cairn India has decided to seek shareholders’ nod on the government’s riders for approving the deal. (BS)
Tata Teleservices announced "unification" of two divisions offering services based on CDMA and GSM raising fears of job cuts. (ET)
Recovering from the shock!
To get into the best society nowadays, one has either to feed people, amuse people, or shock people - Oscar Wilde.
It's neither amusing nor interesting. It's a bit shocking. Some call the RBI's move a big leap of faith while many industries are moaning on their fate. Dr. D. Subbarao has upped the ante in the battle against inflation by jacking up rates by an aggressive 50 bps. What’s more, the central bank doesn’t seem to be lowering its guard either. It is ready to sacrifice a little bit of growth in the near term to improve long-term prospects. A further 25-50 bps hike is not ruled out. Let’s hope for some big relief on the inflation front.
Markets head towards a soft opening
The start is expected to be in the negative terrain led by the weak Asian cues. L&T Finance Holdings IPO opens for subscription today.
Headlines for the day:
JSW nears Ispat debt refinance deal
Cognizant to acquire CoreLogic India unit for $50 million
Cairn India to seek shareholders' nod for accepting govt riders
Gold strikes another record high
US debt fears continue to impart shine on bullions
Precious metals had a bright day on Tuesday, 26 July 2011 at Comex. Gold futures rose to a record as U.S. lawmakers remained deadlocked over how to pursue a deal to raise the country's debt ceiling.
Gold for August delivery, the contract with the most volume, added $4.60, or 0.3%, to end at $1,616.80 an ounce on the Comex division of the New York Mercantile Exchange.The December contract, which has the most open interest, added $4.90 to $1,619.30 an ounce.
Crude kisses the $100 mark once again
Prices rise modestly higher riding on low dollar and mixed economic data
Crude prices settled higher on Tuesday, 26 July 2011 at Nymex. Mixed economic data on US home front, low dollar pushed up prices but uncertainty over USA's debt ceiling issue kept gains under check.
On Tuesday, crude oil futures for light sweet crude for August delivery closed higher by $0.89 (0.9%) at $100.09/barrel. Prices fell to a low of $97.82 during intra day trading.
Market may open flat to slightly lower; HCL Tech in focus
The market may open flat to slightly lower tracking weak Asian stocks. Trading of S&P CNX Nifty on the Singapore stock exchange indicates a gain of 4.50 points at the opening bell.
FIIs sold shares worth a net Rs 177.75 crore on Tuesday, 26 July 2011, as per provisional data from the stock exchanges. Domestic institutional investors (DIIs) bought shares worth Rs 31.49 crore on that day. Key benchmark indices tumbled on Tuesday, 26 July 2011 after a higher-than-expected hike of 50 basis points by the Reserve Bank of India (RBI) in its key lending rate at a policy review on Tuesday. The BSE Sensex fell 353.07 points or 1.87% to settle at 18,518.22,
hits lowest closing level since 21 July 2011.
HCL Tech's consolidated net profit rose better than expected 9% to Rs 510 crore on 3.9% rise in total income to Rs 4300 crore in Q4 June 2011 over Q3 March 2011. Consolidated net profit as per US accounting standards was seen rising 7.52% to Rs 503.44 crore on 5% growth in revenue to Rs 4345.08 crore in Q4 June 2011 over Q3 March 2011 as per average estimate of 5 brokerages.
Among prominent results, UltraTech Cement, GAIL (India), Bank of Baroda, Infrastructure Development Finance Company (IDFC), Oil India and Lupin unveil results today, 27 July 2011.
The market may remain volatile in the near term as traders roll over positions in the derivatives segment from the near-month July 2011 series to August 2011 series ahead of the expiry of July 2011 derivatives contracts on Thursday, 28 July 2011.
Reserve Bank of India (RBI) raised key lending rates by 50 basis points at a policy review on Tuesday, 26 July 2011.The RBI has raised its end March 2012 inflation target to 7% as against the previous estimate of 6%, saying inflation has been higher than its expectations. It kept its economic growth forecast of 8% for this fiscal year. The current trends in money supply (M3) and credit growth remain above the indicative trajectory of the Reserve Bank of India, RBI said. Keeping in view the evolving growth-inflation dynamics, the indicative projection of M3 growth for 2011-12 has been revised downwards from 16%, as set out in the May 3 Policy Statement, to 15.5%. Non-food bank credit growth projection has also been revised downwards from 19% to 18%, RBI said.
Notwithstanding some moderation, global commodity prices, especially that of oil, continue to weigh on both domestic growth and inflation, RBI said. The future path of crude oil prices is uncertain. Should the recovery in advanced economies pick up, there may be upward pressure on prices, the RBI said. On the other hand, should the recovery stall, the easy liquidity conditions will continue to prevail leading to continued speculative positions which may prevent prices from softening, RBI said.
RBI said there are risks to the food inflation outlook. First, although the monsoon has been close to normal so far, deficient rainfall in August coupled with higher minimum support prices (MSP) could result in an upward movement in cereals and pulses price inflation. Second, inadequate supply response could keep price inflation of protein-rich items such as egg, meat, fish, milk and pulses high.
The Central Government has budgeted a fiscal deficit of 4.6% of GDP for 2011-12. Subsequent developments have made the achievement of this target much more of a challenge, RBI said. On the expenditure side, the subsidy burden will, in all likelihood, overshoot the budgeted amount in 2011-12 significantly, despite the recent revision in petroleum product prices. On the revenue side, while the tax cuts announced in June 2011, as part of the upward price adjustment of petroleum products, will primarily help in bringing down the magnitude of under-recoveries of oil marketing companies (OMCs), the revenue loss to the Central Government from such tax cuts (about 0.3% of GDP) will impact both the fiscal and revenue deficits.
The large fiscal deficit has been a key source of demand pressures, RBI said. Fiscal consolidation is, therefore, critical to managing inflation. While meeting quantitative targets, the Government also needs to focus on the quality of expenditure to sustain the fiscal consolidation process, which, in turn, will help contain aggregate demand and raise potential output, the RBI said.
Although the impact of past monetary policy actions is still getting transmitted, considering the overall growth and inflation scenario, there is a need to persevere with the anti-inflationary stance, the RBI said. Going forward, the monetary policy stance will depend on the evolving inflation trajectory, which, in turn, will be determined by trends in domestic growth and global commodity prices, the RBI said. A change in stance will be motivated by signs of a sustainable downturn in inflation, it added.
The uncertain global macro-economic environment poses a challenge for the domestic economy from the perspective of financing the current account deficit. In this context, the composition of capital flows remains a concern. In recent months, some shift in composition of capital flows towards foreign direct investment (FDI) has been observed. This trend needs to be reinforced through policy actions to improve the quality of financing of the current account deficit, RBI said.
Reacting to the RBI's monetary policy review, Devendra Kumar Pant, Director, Fitch Ratings said, "RBI's monetary policy was announced in the backdrop of sticky inflation, growth moderation and uncertain global economic conditions. The hike in repo rate by 50 bps is mainly to control inflation, especially non-food manufactured inflation, which is going out of hand. This will certainly have its impact on economic growth, which is likely to be below 8%."
As the crucial corporate earnings season gathers steam, investors will closely watch the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when Indian firms are witnessing cost pressures amid rising interest rates and staff costs. A hike in transportation costs will add to cost pressure of India Inc. As per reports, freight rates have gone up by 8% to 9% on all routes across India following the recent hike in diesel prices.
State-run oil exploration giant ONGC, FMCG giant Hindustan Unilever, Cigarette major ITC, Sun Pharma, cement majors--ACC and Ambuja Cements, Jindal Steel & Power, state-run Punjab National Bank, and GSFC unveil results on 28 July 2011. ICICI Bank, Power Finance Corporation, Bhushan Steel, Idea Cellular and TVS Motor unveil Q1 results on 29 July 2011. Sun TV announces Q1 results on 1 August 2011. Power Grid Corporation unveils Q1 results on 2 August 2011.
Bharti Airtel and United Spirits unveil Q1 results on 3 August 2011. Adani Power, Mundra Port And Special Economic Zone and Indian Hotels announce Q1 results on 4 August 2011. IL&FS Transportation Networks announces Q1 results on 5 August 2011. M&M announces Q1 results on 8 August 2011. ABB, Mahindra Satyam and GMR Infrastructure announce quarterly results on 9 August 2011. Tata Power unveils Q1 results on 10 August 2011. Tata Motors unveils Q1 results on 11 August 2011. Hindalco and Coal India unveil Q1 results on 12 August 2011. Aditya Birla Nuvo unveils Q1 results on 13 August 2011.
Asian shares retreat as the U.S. remains without a deal to prevent default before an Aug. 2 deadline and amid some unexpected economic data from the region. The key benchmark indices in China, Hong Kong, Japan, Singapore and South Korea fell by between 0.01% to 0.56%. The key benchmark indices in Indonesia and Taiwan rose by between 0.19% to 0.37%.
U.S. stocks closed near session lows Tuesday as the extended standoff in Washington over hiking the debt ceiling went unresolved. Republicans and Democrats labored to round up votes for dual debt proposals to avoid a potential default.
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