Indian share markets remain in red

Wed, 3 Jul 11:30 am

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Indian share markets have remained in red during the previous two hours of trade. The most noticeable upward movements have been witnessed in the FMCG and healthcare sectors while realty and metals have witnessed some selling pressures.

The BSE-Sensex is down by 237 points and NSE-Nifty is down by 74 points. However, BSE Mid Cap is down by 1.4% and BSE Small Cap is down by 0.9%. The rupee is trading at 60.08 to the US dollar.

All of the auto shares have slipped in red except Force Motors and Hero Motocorp, the only ones leading the gains with TVS Motors and Tube Investments facing the maximum selling pressure. According to a leading financial news medium, Mahindra & Mahindra, the auto major has raised Rs 5 bn in a 50-year unsecured bond sale programme, becoming the first domestic firm to sell such a long-tenure rupee debt instrument. The bond can be redeemed at the end of maturity and carries an annual interest rate of 9.55% and does not have call or put option. The proceeds of the issues are expected to be utilised for capex, project funding, refinancing of capex plans as well as long-term working capital requirements. The management was keen to do a benchmark deal with a longer maturity horizon and leverage upon its credit profile. Yes Bank stands as a sole merchant banker to the deal. Rating agency CRISIL has assigned an AA+ or stable rating to the instrument. In its statement, the agency cited that this issue will be the first 50-year plain-vanilla rupee denominated instrument by a domestic corporate. And this is indicative of the increasing investor confidence in corporate and holds good for the long-term prospects of the country. Mahindra & Mahindra share was down by 1%.

Except few, all of the Finance shares have slipped in red with Geojit BNP Paribas and Prime Securities leading the gains while Rural Electrification Corporation and Power Finance Corporation facing the maximum selling pressures. According to leading financial news daily, IDFC Limited, the infrastructure financing institution, has embraced 'Equator Principles (EPs)' performance standards. IDFC, with a balance sheet size of Rs 710 bn signed up the EPs in June becoming the first financial institution from India to do so. The EPs are expected to change the dynamics of how infrastructure projects are designed, financed and constructed. EPs were first launched in June 2003 by 10 private financial institutions alarmed by the environmental and social disorders that most infrastructure projects caused. These institutions adopted a voluntary set of reforms for assessing and managing environmental and social risks pertaining to large infrastructure projects. In the opinion of the IDFC management, adherence to these standards will ensure expansion of its business and enhancement in asset quality with no impediments to growth. IDFC has grown aggressively over the past decade; although it has been enforcing environmental standards all along. The gross loan book of IDFC grew at 38% CAGR over the last decade and profits have grown at 18% over the last year despite the challenging times. IDFC Limited share is down by 6%.