As per a leading daily the wholesale price index (WPI) based inflation fell to a nine-month low of 4.68% in February. However, the core inflation continued to rise, registering a 0.4% increase from 2.8% in December 2013 to 3.2% in February 2014. The steady decline in WPI has raised hopes of the Reserve Bank of India keeping policy rates unchanged in the upcoming monetary policy scheduled on 1st April 2014.
Majority of the power stocks are trading on a negative note today with leading losers being Torrent Power and PTC India. However, Tata Power is trading marginally higher. As per a leading business daily, Tata Power which plans to offer right shares from 31st March in a ratio of 7:50, is believed to be underwritten by its promoter Tata Sons. The promoter holds 32.47% stake in the company. In case the offer is under-subscribed, the company's parent is expected to cover up to 50% of the issue. The final amount that Tata Sons plans to underwrite is yet to be finalized. The size of the issue is expected to be about Rs 20 bn. In two earlier rights share offerings of Hindalco and Tata Motors in 2008, promoters were forced to step in to bail out. While promoters underwriting right share offers is not a normal thing but it improves the confidence level in the company amongst investors and minority share holders.