The News International Team
Live Market Commentary
12:55pm BHEL in Focus
Bharat Heavy Electricals (BHEL) has achieved a major breakthrough by bagging a prestigious contract for setting up a supercritical thermal power project on EPC (engineering, procurement and construction) basis from Gujarat State Electricity Corporation (GSECL).
Valued at around Rs 3,536 crore, the order for setting up a 1×800 MW coal-fired supercritical thermal unit at Wanakbori in Kheda District of Gujarat, has been won by BHEL against international competitive bidding (ICB).
Significantly, this is the first ever project of 800 MW unit rating ordered in the country on EPC basis and is also the highest valued order placed by GSECL, said BHEL.
12:45pm Market Check
The market jumped further with the Sensex rising 398.78 points or 1.50 percent to 27030.07 and the Nifty adding 116.55 points or 1.46 percent to 8092.05.
About 2063 shares have advanced, 736 shares declined, and 86 shares are unchanged.
IT solutions company Mastek has been in focus with the stock moving up over 35 percent this week. The company is set to demerge its insurance business into a new company — Majesco — that would focus on software products.
In an interview to CNBC-TV18, Farid Kazani, Group CFO & Director Finance, Mastek, said the company demerged its insurance business due to different capital requirements.
“We do feel the valuations of insurance products business in the US are significantly different and the restructuring has been done in such a manner that the entire value chain of the insurance business comes under the US subsidiary, MajescoMastek US,” he said.
Kazani said the company will need to make necessary products investment in insurance business and there are plans to grow the business both organically and inorganically. Mastek has been looking at small-ticket acquisitions in the insurance products business in the US. The company has Rs 130 crore of cash on the books, which can be used for the purpose.
Kazani said the company may raise marginal debt in insurance business in the US at lower rates. Any fundraising in US won’t affect the India business, he said, adding that nothing has been finalised yet on the acquisition front.
12:20pm IFCI in News
Malay Mukherjee, CEO & MD, Industrial Finance Corporation of India (IFCI) said the company has received three bids for its 2.5 percent stake in National Stock Exchange (NSE) and the stake sale is in the process of evolution. He expects the process to be over by September 30.
He further added that government might hike its stake in IFCI via the preferential share route. The government holds 55 percent of IFCI equity and wants to support the company in a big way, he said.
Speaking about the company’s financials, he said IFCI has not seen much slippage in this quarter and recoveries are on target. However, credit growth seen in FY15 won’t be as good as anticipated earlier, he said.
12:10pm Market Expert
R Sreesankar, Head of Institutional Equities at Prabhudas Lilladher feels that one shouldn’t be surprised by the market’s upmove today given its euphoric mood last week.
According to him, the only fact that could have unnerved the bulls and speculative positions for some time could have been that the bypoll election results were not as per market’s expectations, as they were not in favour of BJP. Secondly, the uncertainty of Fed move. But now the elections news seems to have been digested and the Fed uncertainity out of the way, so the optimistic view for the market would continue.
12:00pm Equity benchmarks extended the rally in noon trade with the Sensex reclaiming 27000 level supported by banks, oil & gas and capital goods stocks. In fact the market recouped all its losses seen in first two days of the week.
The Sensex jumped 362.56 points or 1.36 percent to 26993.85 and the Nifty spiked 104.55 points or 1.31 percent to 8080.05. More than three shares advanced for every share declining on the BSE.
The broader markets continued to outperform benchmarks with the BSE Midcap and Smallcap indices rising 1.7 percent and 2.5 percent, respectively.
Housing finance company HDFC topped the buying list, up 2.6 percent followed by L&T, Tata Motors, Sun Pharma, Wipro, Dr Reddy’s Labs, Hero Motocorp, Tata Steel and Hindalco Industries with 2 percent gains each. However, HUL, Infosys and M&M remained under pressure.