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Mid & small caps buck the trend
Fri, 1 Apr 01:30 pm

After trading flat during the previous two hours of trade, Indian stock market indices have failed to gather any momentum and are currently consolidating in a narrow zone. Stocks from the realty and metals' space are trading strong, while those from the banking and oil & gas space are trading marginally in the red.

Currently, the BSE-Sensex is down by 12 points while NSE-Nifty is trading 9 points below the dotted line. However, BSE Midcap and BSE Small cap indices are both up by 1.1% and 1.5% respectively. The rupee is trading at 44.44 to the US dollar.

Infrastructure stocks are trading firm with Supreme Infrastructures and Unity Infrastructure leading the gains. However, Simplex Infrastructure and GMR Infrastructure are trading flat. HCC has redeemed the FCCBs with nominal value of US$ 96 m (Rs 4.3 bn) that were due for redemption today. The total amount repaid on redemption along with accrued interest totaled to US$ 133 m (Rs 5.9 bn). Considering the stretched balance sheet and negative cash flows there was a concern on whether the company would be able to make the repayment on time. Refinancing the FCCBs by taking a term loan with higher interest rate was one of the options left with the company considering the stretched balance sheet and dwindling cash flows. However, it is interesting to note that the repayment was funded through internal accruals. This was a positive sign and was well received by the market. It may be noted that the stock of HCC is currently trading with a marginal gain of 1.3%.

Metal stocks are trading firm with Ispat Industries and JSW Steel leading the gains. However, Hindustan Zinc is trading weak. Hindalco has raised Rs 78.7 bn through loan for its aluminum smelter project in Mahan, Madhya Pradesh. The company had successfully achieved the financial closure on the same project recently. The total cost to build the plant is expected to be in the region of Rs 105 bn with the debt component being Rs 78.7 bn. Royal Bank of Scotland and Kotak Mahindra bank were the lead arrangers for the loan. The Mahan plant will have an annual capacity of 359,000 MT a year and the company will also generate 900 MW of captive power from the project. It may be noted that apart from the existing capacity expansion plans the company also plans to construct four aluminum smelting and one refining plant.

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