Indian Stock markets continue in green

Fri, 20 May 01:30 pm

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The Indian stock market indices continued to trade in the green in the last two hours of trade. Most of the sectoral indices are trading firm. Stocks from the capital goods, power and healthcare sectors are trading firm, while those from PSU and Oil & Gas are trading weak.

The BSE-Sensex is up 151 points while NSE-Nifty is trading 49 points above the dotted line. Both BSE Midcap and BSE Small cap indices are up 0.6% each. The rupee is trading at 44.91 to the US dollar.

Engineering stocks are trading mixed with Voltas, Larsen & Toubro (L&T) and Crompton Greaves leading the pack of gainers. However, Jain Irrigation Systems and TRF Ltd are trading weak. As per a leading financial daily, Crompton Greaves has acquired Emotron Group for Rs 3.7 bn. The acquisition is a step in the direction of becoming a global player in providing comprehensive solutions in Industrial systems business. Emotron is a power electronics and engineering company based in Sweden. It is engaged in manufacturing of various equipments, including variable frequency drives (VFDs).The global market for VFDs is expected to expand from US$ 10 bn in 2010 to US$ 16 bn in 2014 on back of rising energy costs and global focus on energy efficiency and legislations. The present market for VFD's in the country is estimated to be US$ 375 m. The acquisition would also enable the firm to offer the latest technology in India. This is the eighth acquisition in a span of six years by the company.

Telecom stocks are trading mixed as well with Bharti Airtel, Reliance Communication and Idea Cellular leading the pack of gainers. However, Himachal Futuristic and AGC Networks are trading weak. As per a leading financial daily, Bharti Airtel has put on hold a proposed sale of bonds worth US$ 1 bn to global investors due to unattractive pricing. The company had recently selected seven banks to manage the proposed issue. As per some anonymous company sources, the joint book runners to the issue proposed a pricing of around 3.5% above the 10 year US treasury rate for the issue , based on the feedback from investors. This compares to a 10 year US treasury rate of 3.18%. There is no formal announcement from the company yet.

Bharti had planned to issue the bonds from its African subsidiary, Bharti Airtel International Netherlands (BAIN), which acts as the holding company for the African operation. The proposed bond issue was meant to help Bharti refinance some of the high-cost debt on Zains' balance sheet. Bharti acquired Zain's African operations for an enterprise value of US$ 10.7 bn and agreed to absorb US$ 1.7 bn of debt on the balance sheet of the company as part of the deal. It financed payouts worth US$ 9 bn for the acquisition by raising a multi-tranche loan of US$ 7.5 bn from a consortium of lenders led by Standard Chartered Plc.