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Indian Indices Trade in the Red
Wed, 23 Mar 11:30 am

After opening the day marginally lower, the Indian indices registered further losses and went on to trade in the red. Sectoral indices are trading on a mixed note with stocks from the energy and consumer durables sector witnessing maximum selling pressure. Telecom and metal stocks are trading in the green.

The BSE Sensex is trading down 149 points (down 0.6%) and the NSE Nifty is trading down 34 points (down 0.4%). The BSE Mid Cap index is trading marginally lower and the BSE Small Cap index is trading up 0.2%. The rupee is trading at 66.88 to the US$.

PSU banking stocks are trading in the red with Central Bank and Bank of Baroda witnessing maximum selling pressure. As per a leading financial daily, State Bank of India (SBI) has raised Rs 5 billion from the issue of bonds on a private placement basis. The bank has issued 5,000, Basel III compliant, Tier-II bonds in the nature of debentures. The debentures come at a face value of Rs 10 lakh each at par, with a 10-year tenure, bearing 8.45% per annum coupon payable annually and with a call option after 5 years.

The fund raised is part of the bank's Rs 120 billion debt capital. Last week, the public sector lender had raised Rs 30 billion on a private placement basis. Further, earlier, on March 9, the SBI board had approved raising the remaining Rs 50 billion of the Rs 120-billion fund-raising programme.

The programme for raising Rs 120 billion was announced by the bank earlier in December. The bank has so far raised Rs 40 billion and Rs 30 billion in two tranches through the issue of debt instrument as a part of the programme. On 19 February, the bank had informed BSE that it raised Rs 30 billion from Basel-III compliant bonds to fund business growth. Further, the bank on December 24th announced that it raised Rs 40 billion by issuing Tier-II bonds on private placement basis under the Basel-III norms.

One shall note that the Basel-III norms are aimed at bolstering banks' resilience. Further, according to Fitch Ratings Report, Indian banks need US$ 140 billion worth of capital to ensure full compliance with the Basel-III norms by 2018-19. Several PSU banks have in the recent past announced the capital raising by way of bond issue. This is because they would need to hold more capital for every new loan they give in order to absorb any losses that may arise if the borrowers default on the loan, according to the Basel III accord. One should also note that earlier in August last year the the government had announced fund infusion of Rs 201 billion into 13 PSU banks. SBI cornered a hefty sum of Rs 55 billion in the same.

Presently the stock of SBI is trading down by 0.5%.

Stocks in the pharmaceuticals space are trading on a mixed note with Strides Shasun and Ajanta Pharma leading the gains.

In another news update, it was reported that Glenmark Pharmaceuticals has been granted final approval by the United States Food & Drug Administration (US FDA) for Raloxifene Hydrochloride Tablets USP, 60 mg. The tablets are the therapeutic equivalent to the reference listed drug product, Evista Tablets, 60 mg, of Eli Lilly and Company. According to IMS Health sales data for the 12-month period ending January 2016, the Evista Market achieved annual sales of approximately US$336.5 million.

Glenmark's current portfolio consists of 109 products authorized for distribution in the US marketplace and 60 ANDA's (abbreviated new drug application) pending approval with the US FDA. The company does not have any regulatory issues, as seen for most of the pharma companies. As we had stated in our result analysis report of the company (subscription required) ... 'With robust filings in place, we believe the company will be able to overcome the impact of global headwinds over a period of time.'

Presently the stock of the company is trading up by 1.1%.

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Oct 23, 2017 03:35 PM

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