Auto and IT Stocks Lead the Losses

Fri, 13 Nov 01:30 pm

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After opening weak, the Indian Indices have continued to remain under pressure during the post noon trading session. Sectoral indices are trading on a negative note with stocks from the capital goods, auto and IT sectors bearing the maximum brunt.

The BSE-Sensex is trading lower by 236 (down 1%) and the NSE-Nifty is trading down by 61 points (down 0.8%). The BSE Mid Cap index is trading 1.4% lower and the BSE Small Cap index is trading down by 0.8%. Gold prices, per 10 grams, are trading at Rs 25,405 levels. Silver price, per kilogram, is trading at Rs 34,034 levels. Crude oil is trading at Rs 2,762 per barrel. The rupee is trading at 66.14 to the US$.

As per an article in Business Standard, Mahindra & Mahindra (M&M) is in talks with banks to raise up to Rs US$ 500 million via its debut bond in the next few weeks. The money raised through this issue is will be utilized to fund its capital expenditure.

Reportedly, the company had also recently indicated that it is planning to incur capex worth Rs 25 billion each year for the next two years. The amount would be mainly utilized on new product launch and research development.

The company is also gearing up to raise its production. This is as it is likely to witness volume growth over the next two years, driven by recovery in both the automotive and the tractor segment.

After a brief calm trend, issuance of bonds by Indian companies has picked up pace. This is respite of the fact that the interest rates are coming down. As Dollar bonds are cheaper by 3-4% then local loans, a lot of Indian companies with forex earnings prefer to raise funds via this route. Apart from M&M, government-owned electricity producer NTPC is also in the market with a US$ 750 million rupee-denominated 'masala bond'. Home loan major HDFC Bank is also keen to launch a similar-sized masala bond issue after Diwali, while Power Finance Corporation (PFC) is also gauging investors' interest for a US$ 500 million issue.

Stocks in the telecom space are trading on a negative note with Reliance Communications and AGC Networks witnessing maximum selling pressure. As per a leading financial daily, Bharti Airtel is intending to issue Sterling Bond of up to GBP 500 million which will be listed on the London Stock Exchange. The proceeds from this issue will be used for refinancing its existing loan portfolio. However as per the management, the issue said issue would remain subject to necessary authorizations and approvals, global credit environment and market conditions.

Reportedly, the intended bond issue will help Bharti drive its strategy of further diversification and further extension of maturities.

Presently the stock of Bharti Airtel is trading down by 0.1%.