Indian share markets firm up

Mon, 19 May 01:30 pm

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Led by continuous buying activity among index heavy weights stocks, the Indian markets continued their northward journey during the previous two trading hours. Buying activity is being led by stocks from power, engineering and metal sectors, while few stocks from sector like IT and healthcare are trading weak.

The BSE-Sensex is trading up by 285 points and the NSE-Nifty is trading up 74 points. The BSE Mid Cap index is trading up 3% and the BSE Small Cap index is trading up 4.8% today. The rupee is trading at 58.43 to the US dollar.

Majority of software stocks are trading weak today led by HCL Technologies and TCS. However, NIIT is trading on a firm note. As per a leading business daily, Infosys plans to hire a non-founder CEO in its 33 years of history. It plans to match the CEO pay structure to rival players in the industry like TCS and Wipro. Until now, the top job at Infosys has gone to its founding members. And because of that the company managed to compensate them at relatively lower rates than peers, as their shareholding in the firm compensated their remuneration. This is at a time when the company is in a process to regain its lost leadership. The outgoing founder CEO Shibulal, who expressed his resignation ahead of the planned retirement in March 2015, drew an annual salary Rs 1.6 m, however he held stake in the company. The pay structures for rivals are about Rs 61 m per annum for Wipro's TK Kurien and Rs 18 m plus equity stake for TCS's N Chandrasekran. However, if non founding member is recruited for the position the role and power he might have is a point of concern. Therefore, it would be interesting to see how things shape up and the company abides by its transparent corporate governance practice. Infosys is trading lower by 5% today.

Barring Himatsingka Seide, all the textile stocks are trading in the green led by Pioneer Embroideries and Bombay Dyeing. As per a leading financial daily, Kumar Mangalam Birla is set to make a direct purchase of 16% stake in Century Textiles and Industries, a company that will be finally inherited by him from his grandfather Basant Kumar Birla (B K Birla). The purchase will be made though four private companies that will subscribe to 18.6 m preferential warrants of Century Textiles to be converted into equity shares in 2015. After conversion, the four investment companies will hold 16.8% stake in Century Textiles. The amount of Rs 6 bn ( at current six-month average price) raised will be used to trim debt and there will be no change of control of the company after the preferential allotment. Century Textiles, currently managed by B K Birla, earns 75% of its revenues from garments and cement and is synergistically related to Aditya Birla Group units Madura Garments and Ultra Tech. The promoters hold 40% stake in Century Textiles mainly through listed company Pilani Investments. This consolidation move comes in the light of Kumar Mangalam Birla Group attempting to evolve into a global conglomerate. Prior to this, Kumar Mangalam Birla has raised stake in Hindalco to more than 50% and acquired controlling stake in financial services company, Aditya Birla Nuvo. Century Textiles is currently trading up 9.5%.