Indian stock market
indices have extended their losses after opening trade on a weak note. Stocks from the realty
space are trading in the red, while those from the FMCG and healthcare space are trading firm.
Finance stocks are trading in the red on heavy selling witnessed in India Infoline and SREI Infra. REC, the power finance company is looking at raising US$ 1 bn through FCCBs (Foreign Currency Convertible Bonds). It has approached the Power Ministry for approving the same. The state run company finances various power projects especially rural electrification initiatives. It plans to raise Rs 280-300 bn (US$ 6 bn plus) more in the current fiscal. Of these, the company will be borrowing US$ 1.5 bn from overseas. REC is looking at a mix of options for raising finance including loans from State Bank of India and issue of Swiss franc bonds.
Pharma stocks are trading marginally higher. Cadila Healthcare and Piramal Healthcare are the top gainers. Biocon Limited is the biggest loser. As per a leading financial daily, Indian pharmaceuticals company Piramal Healthcare has entered into an agreement with Indian telecom major Vodafone Essar to purchase 5.5% of issued equity share capital of Vodafone Essar Limited (VEL) from Essar. The deal is of a cash consideration worth around Rs 29 bn. The deal also has various exit options for Piramal, which includes participation in future initial public offering (IPO) of VEL and a sale of its stake to Vodafone. Earlier Vodafone had announced it would buy 33% from Essar in their joint venture VEL. But this transaction raised Vodafone's stake in the joint venture to 75.35% exceeding the foreign direct investment (FDI) limit of 74%. As a result Vodafone had to transfer at least 1.35% to an Indian investor to comply with the regulations. As far as Piramal Healthcare is concerned, the company is looking to diversify into other fields post the sale of its domestic formulations business to Abbott Laboratories for a consideration of US$ 3.72 bn.