Indian stock markets continued its upward journey in the last two trading hours. All the sectoral indices are trading in the positive with realty and banking stocks trading the strongest and capital goods stocks trading the weakest.
With solar power tariffs rapidly declining and the government projecting achievement of grid-parity by 2017, the sector is attracting a lot interest from Indian companies. Tata Power recently brought out its partner BP's stake in the solar joint-venture having presence in solar photovoltaic cells and solar modules. Mahindra Solar recently commissioned 5 MW unit in Rajasthan and plans to add 100 MW in three years. As per a leading financial daily, the BK Goenka-led Welspun Group is outlining plans to produce at least 500 MW of solar power by 2014. The company has already commissioned 30-MW solar energy projects and is currently working on various projects totaling 80 MW, which are in various stages of completion. The group is also bidding for solar power projects outside India, especially Asian countries. Reportedly a government agency will develop a solar atlas of India to aid the development of solar power projects in the country.
Majority of the energy stocks are trading in green with Mangalore Refinery and Petrochemicals (MRPL) and Gujarat State Petronet the biggest gainers. As per a leading financial daily, Oil and Natural Gas Corporation Ltd. (ONGC) has been paid Rs 30 bn by Cairn India towards its share of royalty till September 2011 for the Barmer oilfield in Rajasthan. Cairn India has 70% participating interest (PI) in the oil field while the balance 30% is held by ONGC. In the earlier set up, it was ONGC paying royalty on Cairn India's behalf to the Government. However, the Government put a rider for the sale of a majority stake of the latter to Mr. Agrawal promoted Vedanta Resources. As per the production sharing contract, ONGC will first pay the royalty. Later, Cairn India will reimburse its share to the government-run explorer. Because of the royalty relief, ONGC will be saving upto Rs 120 bn over the next fifteen years. ONGC will have to pay service tax on this income. The impact of this event will be reflected in third quarter financials of ONGC. ONGC stock was up by 0.8%.