Indian stock market indices are trading weak over the last two hours of trade on back of heavy selling activity witnessed across index heavyweights. Power and Realty stocks witnessed maximum selling pressure.
Energy stocks are trading in the red led by Essar Oil and Gas Authority of India (GAIL India Limited). According to a leading financial daily, GAIL and Hindustan Petroleum Corporation Limited (HPCL) have signed a pact with West Bengal government to form a joint venture with Greater Calcutta Gas Supply Corporation Limited (GCGSCL) for supplying coalbed methane gas in the state. The natural gas will be used by industry, automobiles and households. GAIL and HPCL will own 33% each in special purpose vehicle (SPV) while GCGSCL will own 26% stake in SPV which will partly be in cash and the rest in physical assets. The SPV will invest Rs 20 bn over the next 2 to 3 years to build a gas pipeline in Kolkata. Around 70% of the funds for the SPV will be raised in debt.
Power stocks are trading weak led Power Trading Coropration (PTC India) and Power Finance Corporation (PFC). According to a leading financial daily, the Government has cleared the setting up of an inter-ministerial panel to finalise the financial compensation for National Thermal Power Corporation (NTPC Limited) against the investment incurred by the power major on a hydro project in Uttarakhand that was scrapped last year. NTPC had spent about Rs 6 bn on the project when construction was stopped in August last year. Compensation to NTPC will ensure that the country's largest public sector thermal power generator does not suffer any financial loss because of discontinuance of the project, which it started implementing after obtaining all statutory clearances. The project was scrapped because of environmental concerns.