The Sensex today is down by around 3 points (0.01%), while the NSE-Nifty is trading flat. However, mid and small cap stocks are trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.3% and 0.4% respectively. The rupee is currently trading at Rs 63.41 to the US dollar.
Oil & gas stocks have opened the day on a mixed note with Castrol India, Oil India and Essar Oil leading the gains. However, Bharat Petroleum Corporation Ltd (BPCL) and Oil & Natural Gas Corporation (ONGC) are facing selling pressure. As per a leading financial daily, leading automobile lubricant manufacturer Castrol India is set to return half of the company's share capital back to the shareholders. The cash-rich company has a share capital of Rs 4,945.6 m (494.56 m shares of Rs 10 face value). Castrol will return Rs 5 per share to the shareholders and thereby reduce the face value by half to Rs 5 per share. Following the offer, the company's share capital will halve to Rs 2,472.8 m. It must be noted that shareholders will be exempted from any tax liability. It must be noted that this is a first of its kind move by a listed Indian company to reduce the share capital of the company. As of year ended 31 December 2012, the company reported reserves and surplus of Rs 1,546.7 m and cash of Rs 5,745.9 m on its balance sheet.
Steel stocks have also opened the day on a mixed note with Steel Authority of India Ltd (SAIL), and Adhunik Metaliks leading the gains. However, Jindal Steel and JSW Steel are trading in the red. As per a leading financial daily, state-run steel producer SAIL has commenced a cost optimisation initiative wherein the company will focus on input optimisation, improving operational efficiency, faster stabilisation of newly commissioned units and lowering overhead costs. Through this initiative, the company aims to save about Rs 50 bn over the next three years. The company has witnessed severe pressure on profit margins owing to high input costs and flat prices of steel due to the weak economic conditions. The volatility in the prices of coal, higher railway freight, power tariff, royalty on minerals, rupee depreciation, etc. have significantly increased the cost of production.