Profit booking in mid, smallcaps

Tue, 12 Feb Closing

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   11:30 am   

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Backed by buying interest in energy, mining, pharma and telecom stocks, the benchmark Indian indices managed to lead the pack of gainers in Asian region today. Major sector indices except metal and IT indices closed higher today. While the BSE Sensex closed higher by around 100 points, the NSE-Nifty closed higher by 25 points. However, the BSE Mid Cap and the BSE Small Cap closed below the dotted line.

As regards global markets, most Asian indices closed higher today while European indices have also opened higher. The rupee was placed at Rs 53.90 to the dollar at the time of writing.

As per a business daily, the government has decided to infuse capital worth Rs 1.4 bn via issue of preferential shares into Punjab & Sind Bank in 4QFY13. The bank has proposed preferential allotment of 19.8 m shares to the Government for Rs 70.6 a share including premium of Rs 60.6 per share. Post capital infusion, the government holding in the bank will go up to 79.9% against the existing 78.2%. Besides offering more capital headroom for growth, the additional capital will also gear up the bank to comply with Basel II norms.

Tata Power, the country's largest private power utility, recently declared the results for the third quarter and nine month period of financial year 2012-13 (9mFY13). The company reported a 20% YoY growth in standalone net revenues while net profits decline by about 22% YoY during the period. Tata Power's generation volumes increased by over 11% YoY during the 9mFY13 period ended December 2012. On segmental basis, revenues from the power segment were up 64% YoY; those from the coal segment were down by 9% YoY in 3QFY13. Tata Power's woes with its Mundra project continue. The company's consolidated profits took a hit of Rs 6 bn during the quarter ended December 2012 on account of impairment losses. The company has cited uncertainty of cash flows as the reason for the same. Total impairment losses in the 9mFY13 period stand at Rs 8.5 bn as compared to full year FY12's impairment losses of Rs 18 bn. These losses however come in at a time when the company has filed a petition with the CERC to revise its tariffs given the increased fuel costs. The outcome of the same would be crucial for the company.

Meanwhile, the company is considering overseas opportunities in Africa and West Asia for its distribution business. The company has already entered into Nigeria for providing technical services for Benin Distribution Company. The bid was won by its distribution arm Tata Power Delhi Distribution (TPDDL). The company has also signed an agreement for offering transmission and distribution solutions for an upcoming township in Kenya.