The Indian markets made further inroads into the positive territory during the previous two hours of trade although the session was marked with volatility. While capital goods, metal and power stocks are trading firm, profit booking is being witnessed in select FMCG, auto, consumer durables and IT stocks.
The BSE-Sensex and the NSE-Nifty are currently trading higher by around 90 points and 31 points respectively. Stocks from the midcap and small cap spaces are currently trading firm, with the BSE-Midcap and the BSE-Smallcap indices trading higher by 0.3% and 1% respectively. The rupee is trading at 46.65 to the US dollar.
According to a leading business daily, Mahindra Satyam (erstwhile Satyam Computer Services) has settled its dispute with Upaid, a UK based online and mobile solutions firm. There has been a long-drawn litigation process between the two after the latter alleged Satyam for providing forged documents pertaining to some software patent filing. In 2007 Upaid sued Satyam for over US$ 1 bn for the fraud and forgery case. Finally the new parent, Tech Mahindra succeeded in ending this row with a settlement payment of US$ 70 m. Now Mahindra Satyam will pay US$ 45 m upfront and US$ 25 m within the next 12 months. The agreement also requires Upaid to grant Mahindra Satyam a worldwide, royalty free license on all its patents.
We believe this comes as a relief for the firm as the case was previously expected to be settled for at least US$ 200 m. While this is a positive for Tech Mahindra, such settlements will bring more clarity to the Satyam’s financial conditions. Stocks of both Mahindra Satyam and Tech Mahindra are trading in the green.
As per a leading business daily, Indian central transmission utility, Power Grid (PGCIL) is planning to invest around Rs 16 bn in various grid strengthening projects. Out of this, an investment of around Rs 12 bn will be directed towards strengthening its ultra mega power projects at Sasan and Mundra. These are to be completed in the next 32 months. It will also invest around Rs 3 bn and Rs 1 bn respectively over the next 2 years in strengthening the southern and northern regional grids.
It may be noted that PGCIL gets a major chuck of its revenues (about 88% in FY09) from the transmission business where it charges users a fee for transmitting electricity on its networks. Another 5% of its revenues come from its consultancy business. In this the company utilises its skilled manpower to cater to not only the requirements of in-house projects but also provide consultancy services to various power utilities and state electricity boards and clients outside the country as well. The company plans to spend about Rs 115 bn in FY10, Rs 140 bn in FY11 and another Rs 140 bn in FY12 as capital expenditure towards increasing the capacity of its network and infrastructure. However, its expansion plans have to be more or less in line with the generation capacity expansion in the country. PGCIL is trading in the green.