The BSE-Sensex is up by 126 points while NSE-Nifty is trading 31 points above the dotted line. BSE Midcap index is up by 0.4% while BSE Small cap index is trading 0.6% above yesterday's closing. The rupee is trading at 44.70 to the US dollar.
Finance stocks are trading firm led by India Infoline and ICRA Ltd. State-run Power Finance Corporation (PFC) is coming out with a follow-on-public offer (FPO) to raise Rs 470 bn. This is going to be through divestment of the government's stake. It may be noted that PFC is a Navaratna company and lends to power projects. The price band of the issue has been fixed at Rs 193 - 203 per share. The issue opens today and closes on May 13. As per PFC, the capital generated from the FPO will be used to increase its capital base to ensure compliance with capital adequacy norms and for future capital requirements.
As per a company spokesperson, PFC's future strategy for growth is to expand its business in its core sector which is power finance. The company also plans to spin off its new business units/subsidiaries into individual companies. These companies will focus only on their domain of operations. PFC is also planning to form a separate company to fund wind and solar power projects. Furthermore, PFC has identified certain areas like banking, international markets, capacity building initiative and strategic alliances with domestic and global institutions for its next stage of growth.
Auto stocks are trading firm led by Tata Motors and Force Motors. As per a leading financial daily, sales of Tata Motor's Nano have crossed 10,000 units in April this year. This is the highest sales since the car first hit the roads in July 2009. It may be recollected that in November last year, the sales had dipped to 509 units. It was then that the management decided to rework the execution strategy and develop a strong distribution system.
The increase in sales is on account of mainly two reasons. First, Tata Motors set up 210 F Class showrooms, of about 500 sq ft in size which stock just one car in smaller towns. The auto company has hired 1,200 people to take care of these. Secondly, the tie-up with Big Bazaar of Pantaloon Retail has driven sales in smaller cities and towns. The retail chain has 70 outlets in smaller cities and towns and there is a Nano car parked at each outlet. Big Bazaar has an annual footfall of 150 m people who can now get a touch and feel experience of the Nano. With these innovative ideas, the company has been able to get closer to its consumers. Now, Tata Motors is looking at scaling the production to 10,000 units in three months from the present 5,000 units.