The Sensex today is down by around 55 points (0.3%), while the NSE-Nifty is down by around 22 points (0.4%). However, mid and small cap stocks are trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.03% and 0.1% respectively. The rupee is currently trading at Rs 62.50 to the US dollar.
PSU Bank stocks have opened the day on a weak note with IDBI Bank, Bank of India and Union Bank of India leading the losses. As per a leading financial daily, rating agency Standard & Poor's (S&P) has downgraded public sector lender IDBI Bank's foreign currency issuer rating from BBB- to BB+. The rating agency expects the bank's asset quality to remain weak over the next 12 to 18 months and it has maintained a negative outlook on the bank's long term rating. Apart from the downgrade of foreign issuer rating, the issue ratings on IDBI Bank's senior debt has been cut to BB+ from BBB-, subordinated debt to BB- from BB+, and junior subordinated debt to B from B+. Given the bank's weak asset quality, S&P expects credits cost to remain high. The rating agency has further mentioned that IDBI Bank's non-performing loans in the infrastructure loan book could increase owing to the poor economic scenario in India. It must also be noted that the bank's loan book is fairly concentrated, in terms of single-name exposure.
Power stocks have also opened the day on a mixed note with Torrent Power and KSK Energy leading the gains. However, GVK Power and Infra and National Thermal Power Corporation (NTPC) are facing selling pressure. As per a leading financial daily, India's leading state-run power generation firm NTPC is aiming to save about Rs 450 per tonne on import of 3 million tonne coal transported via waterways from Sagar Islands in West Bengal to Farakka on barges under a new arrangement with OP Jindal Group firm Jindal ITF. Following this arrangement, NTPC plans to import a total 9 million tonne through similar facilities from Sagar Islands to Barh in Bihar. Under a tripartite deal, Jindal ITF has set up facilities for unloading 3 million tonne of imported coal every year from mother vessels at Sagar Islands. The coal will be transported over 500 km through 23 barges to NTPC's thermal power station at Farakka where Jindal ITF has set up a jetty for unloading the coal and moving it to its stockyard on conveyor belts. It is worth noting that earlier coal used to be unloaded at Haldia Docks and transported through railways to Farakka. The landed cost of imported coal at Farakka through Haldia Docks is estimated about Rs 7,300 per tonne. However, through the new arrangement the coal cost will come down to about Rs 6,750 per tonne. This will result in savings of approximately Rs 1.35 bn per annum for NTPC.