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Sensex extends losses; ICICI Maruti down, Hindalco up

12:00

The News International Team

12:40pm Why Hindalco gain?

Supreme Court on Wednesday cancelled 214 coal blocks allocated by government since 1993 to 2010 but exempted four coal blocks (including Sasan UMPP, NTPC and SAIL).

The company had been allocated four coal blocks, which are Mahan coal block jointly with Essar Power, Tubed coal block jointly with Tata Power, Talabira II & III coal blocks jointly with Mahanadi Coal Fields and Nayveli Lignite Corporation, and Talabira I coal block.

Mahan, Tubed and Talabira II & III Coal blocks are not yet in operation while Talabira I coal block feeds coal to the power plant which supplies power to Company’s Hirakud Smelter, the company said in its filing to BSE on Thursday during market hours.

Post market hours yesterday, the aluminium major clarified that SC cancelling coal block allocation will have 1-time impact on company of Rs 500 crore.

“We are not expecting the captive coal immediately. We have plans to operate on purchased coal. However, the only incremental impact of coal blocks cancellation to be on cost of production at Hirakud smelter, which is not expected to be significant,” it said.

12:20pm Interview

Auto components maker Rico Auto has announced the sale of its 50 percent stake in FCC Rico to its Japanese partner, FCC Company, for Rs 495 crore on Thursday. The 50:50 joint venture was for manufacturing and supplying automobile clutch assemblies.

In an interview to CNBC-TV18, Arvind Kapur, Chairman and Managing Director of Rico Auto, said the company signed the deal on Thursday and has even informed the stock exchanges.

“We had a technical collaboration with FCC since 1985. In 1996, we formed a JV with them for the components. The growth has been pretty good in the company. Rico was primarily an investor there with 50 percent equity. But they are the technology provider and wanted to go it alone. Thus we very amicable settled the prices,” Kapur said.

Rico Auto had initially invested Rs 3.95 crore in the JV in 1996-97. The company will use the fund to pay off its debt, which currently stands at around Rs 350-375 crore, Kapur said.

Apart from FCC, the company has JVs with Canadian firm Magna and Chinese company Zhejiang Jinfei. When asked whether the company is looking to sell any more stake in other JVs just yet, Kapur replied in negative.

12:00pm Market Check

Equity benchmarks extended lossed amid consolidation in noon trade. The Sensex slipped 168.78 points to 26299.58 and the Nifty declined 48.30 points to 7863.55. The BSE Midcap and Smallcap indices lost around 0.7 percent.

About 1019 shares have advanced, 1583 shares declined, and 86 shares are unchanged.

Ritu Arora, director of investments at Canara HSBC OBC Life, sees the current downside in the market as an opportunity for new investors to enter the market, though not just yet. She sees more sectoral re-allocation and perhaps another 4-5 percent downside, which will give better investment opportunities.

Shares of HDFC, ICICI Bank, Hero Motocorp, Maruti Suzuki, Cipla, Sesa Sterlite and Punjab National Bank were prominent losers, falling 2-3 percent. ITC, TCS, Tata Motors, State Bank of India, Dr Reddy’s Labs, HUL and Bajaj Auto declined 0.9-1.7 percent.

However, Sun Pharma kept its top position in the buying list, up 4 percent on hopes that the company may not get import alert for Halol facility though it received Form 483. Ranbaxy Labs, which may become a subsidiary of Sun soon, rallied 6 percent.

ONGC, Mahindra and Mahindra, Hindalco Industries and Tata Steel were up 1-3 percent.

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