After a choppy session, Indian indices closed marginally below the dotted line today. While the BSE Sensex closed lower by around 55 points (down 0.3%), the NSE Nifty lost around 14 points (down 0.3%). Midcap and small cap indices did not do any better and had losses of 0.3% and 0.1% respectively. While FMCG and healthcare indices traded firm, banking and auto stocks were at the receiving end. Concerns over the economic aid package for Greece clouded investor sentiments in global markets.
As regards global markets, Asian indices closed largely in the red today. Most European indices have opened on a negative note. The rupee was trading at Rs 44.46 to the dollar at the time of writing.
Infrastructure financing major IDFC declared its FY10 results today. Showing a good traction in loans to infrastructure projects, IDFC grew its net interest income by 21% YoY in FY10. The infrastructure financing institution’s net profits grew by 42% YoY in this fiscal, backed by 55% yoY growth in non fund based income. The institution’s competence in lending for long term projects against banks has aided its growth this fiscal. Meanwhile the RBI has expressed deep concern over asset-liability mismatches (ALMs) in banks’ balance sheets, arising mainly from lending to infrastructure projects. The main concern of the regulator is the huge pipeline of sanctions on which banks are sitting, mostly for core sector projects. With deposit tenures becoming shorter due to low interest rates, mismatches in banks’ balance sheets are likely to get bigger.
Private sector lender Yes Bank also declared its FY10 results today. The bank recorded 55% growth in net interest income on the back of a sterling 79% YoY growth in advances during FY10. The bank’s net profits grew by 57% YoY as also its net interest margins which came in higher at 3.1% (2.9% in FY09). Total Deposits grew by 66% YoY while current and savings account (CASA) deposits comprised 10.5% of deposits at the end of March 2010. The bank has declared its maiden dividend of 15% (Rs 1.5 per share) for the fiscal year 2010.
India, with a total length of 3.3 m kms of roads, has the third-largest road network in the world. The Ministry of Roadways in India had set an ambitious target to build 20 kms of roads per day in FY11. However, a business daily reports, that as per the Ministry, it would now be feasible to build only 12-13 kms of road a day in this fiscal. India will achieve less than half of its target due to problems in acquiring land and awarding contracts. Foreign investors have also shied away from the sector even though the government has allowed 100% FDI. This is due to problems in land acquisition and difficulties in collection of toll tax. In FY11, the government plans to build 3,000 kms of roadways. This cannot be without private sector contribution. The target will need an investment of about Rs 2 trillion annually, of which the government expects 60% to come from the private sector.