Metal Stocks are also trading in the red. Bhushan Steel and Tata Steel are the biggest losers. India's largest public sector steel company, Steel Authority of India, (SAIL) is likely to form a joint venture worth Rs 44.5 bn with National Fertiliser Limited (NFL) who is the second largest nitrogenous fertiliser maker in the country for a urea manufacturing plant in Jharkhand. SAIL plans to invest around Rs 350 bn to set up a 5.6 mtpa (metric tonnes per annum) steel plant, 1.15 mtpa fertilizer plant and a power plant. The Cabinet Committee on Economic Affairs has already given the permission for the project and the government has given an in principle approval to allocate natural gas. The shareholding pattern will be finalized based on detailed project report but it is highly likely that SAIL will retain majority stake.
Auto stocks are trading weak on heavy selling witnessed in Tata Motors and Escorts. As per a leading financial daily, Maruti Suzuki is planning to produce small cars for the Japanese market. As per management, they will be making new small cars for Suzuki in India to be exported to Japan. It may be interesting to note here that Suzuki Motor Corp. has been investing heavily in research and development in India. It has formed joint venture called Suzuki Powertrain India Ltd with Maruti Suzuki. In fact, it has invested Rs 15 bn in an R&D centre coming up at Rohtak, Haryana. This is expected to get completed by 2012. The ultimate objective is to shift the entire manufacturing process to India including conceptualization.