Indian stock markets are still trading in the red. However, markets have pared some of its losses during the previous two hours of trade on account of renewed buying among the index heavyweights. However, mid and small cap indices are trading higher. Stocks from metals and pharma sectors are leading the pack of losers, whereas consumer durables stocks are trading firm.
The BSE-Sensex is trading down by 5 points and the NSE-Nifty is trading down by 9 points. The BSE Mid Cap index is trading up 0.3% and the BSE Small Cap index is trading up 0.8% today. The rupee is trading at 60.80 to the US dollar.
Energy stocks are trading mixed with Chennai Petroleum and Petronet LNG being major gainers whereas Oil India and GAIL are among major losers. As per a leading financial daily, Oil and Natural Gas Corp (ONGC) will be commissioning its long-delayed petrochemical project at Dahej in Gujarat in June 2015. The plant, that would manufacture polymers and plastic products, was originally planned to go on-stream by the end of 2012 but the completion dates have been pushed ahead twice. Due to the long delay there has been an escalation in the project costs from Rs 124.4 bn estimated in 2006 to Rs 271.2 bn as per present estimates. As per the company, the delay in commissioning has been on account of contractors and project cost has inflated due to interest payout during the construction phase. For the purpose of building the mega petrochemical complex, ONGC had set up ONGC Petro-additions Ltd (OPaL) in 2006. As per the original agreement, ONGC was to hold 26% stake in OPAL with GAIL India and Gujarat State Petroleum Corp (GSPC) having stakes of 19% and 5% respectively and the remaining 50% offloaded to strategic investor or offered in an initial public offering. However, due to cost and time overrun, the equity stakes of both GAIL and GSFC have come down but both the companies will not infuse further money in the project. ONGC has no plans of bringing an IPO and will be funding the balance equity stake in OPaL. Till date, ONGC has invested Rs 16.6 bn in OPaL. ONGC stock is currently trading up 1.6%.
PSU Banking stocks are trading on a mixed note today. Gainers are by Punjab National Bank (PNB) and Indian Overseas Bank, while Indian Bank is trading in the red. As per a leading business daily, five associate banks of the country's largest state-run bank SBI would raise about Rs 330 bn in capital to meet its global capital adequacy risk norms as per Basel III. They will raise the sum in next 5 years by end FY19. The five associated banks include State Bank of Bikaner & Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Part of the fund will be raised from markets while balance will be provided from the parent, SBI. Two of these associates have already taken board approval for raising funds through right issue. These are State Bank of Mysore and State Bank of Travancore that have received in-principle approval for from board for Rs 4.25 bn and Rs 4.85 bn through right shares respectively. SBI holds 90% stake in the former, while 79% in the latter. SBI will have to proportionately subscribe the rights shares for maintaining its existing stake. For unlisted entities, funds will be mostly provided from the parent. SBI is trading higher by 0.2% today.