The Indian stock market indices have been trading weak over the last two hours of trade on the back of selling witnessed in index heavyweights. Auto and pharma stocks are leading the pack of losers while stocks from the capital goods space are trading firm.
Energy stocks are trading in the red led by BPCL and HPCL. As per a leading financial daily, GAIL India and Karnataka State Industrial & Infrastructure Development Corp (KSIIDC) have signed a joint venture (JV) agreement to jointly pursue natural gas distribution business in Karnataka. As per the agreement, the JV company will have an authorized share capital of Rs 1 bn. GAIL and KSIIDC will have equity shares of 26% and 24% respectively in the company. The company will focus on setting up of natural gas infrastructure in industrial estates, city gas distribution (CGD) networks, distributed power generation projects in industrial areas and gas distribution infrastructure downstream of trunk lines in the state. The gas supply to the cities will be taken care of by GAIL India's trunk pipelines.
GAIL is implementing the 1,413 km Dabhol (Maharashtra)-Bengaluru (Karnataka) pipeline at an investment of Rs 50 bn with a design capacity of 16 million standard cubic metres per day (mscmd). It is also implementing the 1,114 km Kochi - Koottanad - Mangalore - Bengaluru pipeline, at an investment of Rs 33 bn with a design capacity of 16 mscmd. Both these pipelines are scheduled to be completed by FY13. The stock is trading in the green.
Telecom stocks are trading mixed with HCL and Reliance Communications leading the pack of losers. As per a leading financial daily, Bharti Airtel is in talks with five leading operators-Etisalat, MTN , France Telecom (Orange), Millicom and Vodafone-for sharing telecom infrastructure such as towers and fibre in Africa. The company had expanded operations to 16 African countries last year. It has hived off the tower business in all the African countries it operates in into separate companies. The company is attempting a model similar to that of Indus Towers in India, which it jointly owns with its competitors- Vodafone Essar and Idea Cellular. The trio has combined their physical infrastructure assets in this company. Bharti and Vodafone have 42% stake each in this company while the rest is owned by Idea Cellular. The management ruled out immediate acquisitions in Africa since the top priority is to turnaround its existing businesses there. It also said that the company is on track to meet its targets of US$ 5 bn revenues, US$ 2 bn EBIDTA and 100 m subscribers there by the end of FY13. Currently, the loss-making Africa operations have been weighing down the Bharti's top and bottom lines. Its operating margins for Africa were at 24% for the year ended March 2011 compared to about 37% margins in India. The stock is trading in the red.