Energy stocks are trading strong led by Reliance Industries Limited (RIL) and Bharat Petroleum Corporation Ltd. (BPCL). According to a leading financial daily, Gas Authority Of India Ltd. (GAIL) India has backed out of the race to acquire BG's stake in Gujarat Gas (GGAS) citing expensive valuations. Gail, which aspires to be a countrywide player in the city gas distribution domain through its subsidiary Gail Gas Limited, had initially considered acquiring BG's 65.12% stake in Gujarat Gas. At current market price, BG's stake in Gujarat Gas is valued around Rs 30 bn and the company would expect some premium over that, making it a costly buy. Besides, the successful bidder is required to make a mandatory open offer for minimum 26% stake, making it unfeasible for the company to take part in the auction process.
Auto stocks are trading in the green. Hero MotoCorp and Maruti Suzuki are the biggest gainers while Mahindra & Mahindra Ltd. (M&M) and Escorts are the biggest losers. According to a leading financial daily, Maruti Suzuki is planning to go slow on its project in Gujarat. The construction of factory will now begin only in 2013-14. The slowdown in the domestic car market and Maruti's own internal targets mean that physical work related to the plant will not happen anytime soon. Maruti's board had cleared a proposal in October to enter Mehsana district in Gujarat, and this was to be the company's first foray outside home state Haryana where it has two manufacturing location.