Wednesday, 15 October 2008

Stocks to watch: L&T, RIL, Tata Motors, REC

MUMBAI: The market is likely to open lower Wednesday in the light of weak global cues on worries about the slowdown in the global economy.

Global recession fears returned to centre stage after trillions of dollars pledged by governments around the world for bank bailouts eased the threat of imminent financial meltdown.

Indian rupee opened sharply lower and weakened to 48.44/46 per dollar from previous close of 48.04/06 as global markets declined raising concerns of capital outflow.

The Reserve Bank of India on Wednesday said it will conduct the special fixed rate 14-day repo facility everyday, as the auction at 9 per cent per for a notified amount of Rs 20,000 crore held Tuesday evoked a poor response. Only Rs 3,500 crore of this facility were utilised by the banks. The repo is aimed at enabling banks to meet the liquidity requirements of mutual funds.

Larsen & Toubro is expected to announce its earnings for the July-September quarter Wednesday. Broking houses expect Larsen & Toubro Ltd to report a 27-28 per cent year-on-year growth in topline to Rs 7,000 crore for the September 2008 quarter. Operating profit is expected to a rise at similar percentage to Rs 800 crore.

GR Gopinath, vice-chairman of Kingfisher Airlines, is believed to be considering an offer to buy back Air Deccan as he is reportedly unhappy over the alliance Kingfisher has struck with Jet Airways. He might even offer to buy Kingfisher itself at a meeting of the airline board on Wednesday. Some overseas investors are reportedly backing him in this effort.

Nusli Wadia Group is set to acquire Groupe Danone’s stake in biscuit major Britannia Industries with a committed $200-million funding from ICICI Bank. Wadias will buy Danone’s 50 per cent equity in the UK incorporated holding company, Associated Biscuits International Holding, backed by a five-year loan.

Tata Motors has acquired 50.3 per cent holding in Norway-based electric vehicle major Miljo Grenland/Innovasjon for Kroner 12 million (Rs 9.4 crore). Its UK subsidiary, Tata Motors European Technical Centre, is the investment vehicle for the acquisition. The existing shareholders will retain the remaining stake in the company.

Tata Teleservices’ Virgin Mobile has slashed STD and local call rates on pre-paid services to 50 paise per minute. TTSL-Virgin customers can now call any number, mobile or landline across networks at only 50 paise per minute after the initial three minutes of the day.

The global liquidity crisis has forced Rural Electrification Corporation to put its $700-million external borrowings plan on hold. REC had recently received RBI clearance to raise $500 million through external commercial borrowings and $200 million by way of external commercial assistance. But with interest rates rising following the liquidity crunch, REC has decided to shelve borrowing plans at least for the next 3-6 months.

Reliance Industries has chalked out an elaborate plan to venture into the power business. The plan includes an integrated project comprising coal mining, a coal-to liquid plant, a 1,000-mw power plant based on coal rejects and a fly-ash utilisation unit. The company has entered into a pact with US energy majors ExxonMobil and Headwaters, and German engineering firm Uhde GmbH. The 1,000-mw plant in Orissa is proposed to be put up in partnership with Torrent Power.

Dabur India is in talks to acquire FMCG and pharma company Fem Care Pharma, famous for its Fem bleach, for about Rs 270-300 crore.

Bank of India has invested Rs 150 crore in Lavasa Corporation, a subsidiary of Hindustan Construction Company in the form of convertible debentures. Based on the above investment, the equity valuation of LAVASA gets reconfirmed at Rs 10,000 crore. (Axis Bank Ltd had invested Rs 250 Crore at the same valuation).

Source: EconomicTimes

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