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Thursday Closing Report: Expect movement in a narrow downward band

The market opened on a steady note in the absence of any concrete cues from the global arena. It entered the negative zone in a short while and stayed there till the end. Today’s slide was led by heavy-weights while the broader indices were instrumental in preventing further losses to the market.

The market witnessed a flat opening based on tepid global cues as most Asian markets were closed for local holidays today. Besides, bourses in the US settled lower in overnight trade also kept investors on the sidelines. Retreating from the opening highs, the indices were range-bound in the negative zone despite the influential European indices opening in the green. The market ended in the red amid a high degree of volatility.

At the end of the session, the Sensex ended 80.71 points (0.40%) lower at 19,861. The index touched a high of 19,998 and a low of 19,771 today. The Nifty was down 31.45 points (0.52%) at 5,959. The benchmark scaled an intraday high of 6,007 and a low of 5,932 during the session.

The market breadth was negative. The Sensex ended with 17 declining stocks against 12 advancing stocks while one scrip returned unchanged. The Nifty had 34 declining stocks, 15 gainers and one stock was unchanged. The broader indices, which ended higher, lent a helping hand in preventing further losses to the market. The BSE Mid-cap index ended 0.21% higher and the BSE Small-cap index added 0.07%.

The top gainers on the Sensex were Hindustan Unilever (up 1.71%), Oil and Natural Gas Corporation (ONGC) (up 1.49%), ITC (up 1.32%), Mahindra & Mahindra (M&M) (up 1.11%) and Jaiprakash Associates (up 1.04%). The losers were ICICI Bank (down 2.25%), Reliance Industries (RIL) (down 2.11%), Bharti Airtel (down 1.89%), Cipla (down 1.64%) and DLF (down 1.40%).

The only appreciable gainer in the sectoral space was BSE Fast Moving Consumer Goods (FMCG) index, up 1.10%. The sectoral losers were BSE Realty (down 1.97%), BSE Bankex (down 1.21%) and BSE Oil & Gas (down 1.01%).

The Asian pack witnessed subdued trade with low volume as most markets were closed for local holidays. Speculations that central banks in the region might hike rates to curb rising inflation also played on investors’ minds. Among the ones that were open, Jakarta Composite was down 0.18%, KLSE Composite was down 1.13% and Straits Times was down 0.29%. On the other hand, Taiwan Weighted added 0.07%.

Food inflation advanced to 15.46% in the week ended 11th September, up by 0.36 percentage points from 15.10% in the previous week. The rise in inflation has been attributed to an increase in the cost of cereals, select vegetables and milk due to supply disruptions caused by unusually heavy rains in many parts of the country.

This is the fourth consecutive week that the rate of food prices has risen, although signs of moderation had appeared in July and stayed on through the first half of August.

Meanwhile, fuel inflation for the week in review was unchanged at 11.48%.

The US market closed lower on Wednesday on subdued earnings outlook by technology giants Adobe Systems and Microsoft Corporation. Stocks reversed their earlier gains after the Federal Housing Finance Agency said US home prices tumbled 3.3% in July from a year earlier, the eighth consecutive decline, as foreclosed properties swamped the market. The Dow tripped 21.72 points (0.20%) to 10,739. The S&P 500 slid 5.50 points (0.48%) to 1,134. The Nasdaq shed 14.80 points (0.63%) to 2,334.

Finance minister Pranab Mukherjee today exuded confidence that the Indian economy will post better growth than 8.75% this fiscal, as projected by the economic survey.

"I am optimistic that at the end of this year we will be able to surpass our gross domestic product (GDP) growth forecast of 8.5%-8.75% given in the Economic Survey," Mr Mukherjee said at a function in New Delhi.

Indian economic growth slowed down to 6.7% in 2008-09 from 9% in the previous three years, as an aftermath of the global financial crisis.

Foreign institutional investors were net buyers of Rs914 crore in the equities segment on Wednesday. Domestic institutional investors net sold stocks worth Rs974 crore on the same day.

The Wockhardt hospital group, belonging to pharma major Wockhardt (up 0.70%), has forayed into Goan market by entering into a tie up with National Union of Seafarers of India (NUSI) for their hospital property at Cuncolim village.

"The facility in Goa is a tertiary care hospital with 180 beds and five operation theatres meeting international standards," Wockhardt group chairman Dr Habil Khorakiwala said. The facility will have round-the-clock dedicated dialysis and physiotherapy centres, he added.

Infrastructure and engineering major Larsen and Toubro (L&T) (up 0.17%) today said it would form a joint venture (JV) company with the South Africa-based Befula Investments to explore opportunities in the power sector in the African nation.

L&T and Befula Investments, South Africa have signed an agreement to form a joint venture firm Larsen & Toubro T&D SA, a company release said. The JV company would capitalise on the power transmission and distribution opportunities in South Africa.

IT major Wipro (down 0.58%) today said that Dow Jones Sustainability Index (DJSI) has chosen the Indian outsourcing major as its member. DJSI is an international indicator, which tracks the financial performance of companies having outstanding sustainability conduct.

The selection was done on the basis of an exhaustive, rigorous evaluation of Wipro's sustainability performance on several dimensions like ecological sustainability, supplier standards, digital inclusion, corporate governance, innovation in sustainability, Wipro said in a statement.


Tecpro Systems’ IPO appears fairly priced

However, raw material price fluctuations could impact the company as it has not inked any agreements to insulate itself from cost escalations; it also needs to broaden its client base

Issue Details

Issue Date: 23rd September-28th September
Number of shares: 75,50,000 shares
Employees: 2,00,000 shares
Qualified Institutional Buyers (QIBs): Up to 60% (including 5% to mutual funds)
Non-institutional bidders: 10% 
Retail investors: 30%
Face value: Rs10 per share
Issue price: Rs340 to Rs355 per share
Issue size: Rs268 crore
Listing: BSE & NSE

Post-listing details

Pre-issue promoters' holding: 60%
Post-issue promoter and promoter group holding: 53%
EPS (FY10): Rs25.01
P/E Ratio: 13.59 (at the lower band) and 14.19 (at the upper band)
Highest P/E in the industry: 83.2
Lowest: 7.8
Industry composite: 31.7


Incorporated in 1990, New Delhi-based Tecpro Systems Ltd is engaged in material handling, provides turnkey solutions in material handling, ash handling, balance of plant (BoP) and engineering, procurement & construction (EPC) contracts. The company designs, engineers, manufactures, sells, commissions and services a range of systems and equipment for the core infrastructure related sectors like power, steel, cement and other industries. The company is promoted by Ajay Kumar Bishnoi and Amul Gabrani who are entrepreneurs with around 25 years of experience in the material handling industry.


  •  Project management expertise and established track record of project execution.
  • Strong in-house design and manufacturing capabilities.
  • Technical collaborations and alliances with international manufacturers.
  • Experienced management team.
  • Well-positioned to capitalise on the growth opportunities in the Indian power sector.
  • Strong order book: As on 31 March 2010 and 31 July 2010, its order book stood at Rs2,013.95 crore and Rs2,311.29 crore, respectively.


  •  The company and its group firms are involved in legal proceedings involving Rs1,118 crore.
  • Changes in raw material prices like iron & steel, cement, bearings, castings, plumber blocks could disrupt operations as the company has not entered into any cost-escalation clauses.
  • It derives a major chunk of its revenue from a few customers. Payments from its top 10 customers constituted 68.39%, 65.70% and 66.72% of its income from operations for FY2010, 2009 and 2008, respectively.

Financial Snapshot

Analysts' take

Rating agency CRISIL has assigned an 'IPO Grade 4' to the issue indicating 'Above Average Fundamentals'. 

Objects of the Issue
To fund working capital requirements at Rs200 crore and general corporate purposes.

Its competitors like BGR Energy Systems Ltd, Elecon Engineering Company Ltd, McNally Bharat Engineering Company Ltd, Sunil Hitech Engineers Ltd and TRF Ltd have an EPS of Rs27.9, Rs5.6, Rs11.2, Rs18, and Rs41.90 respectively.

They have a P/E of 29.1, 16.6, 25.3, 10.9 and 19.40 respectively. The issue is priced 34 times of its face value on the lower side and 35.5 times on the higher side. The issue price looks somewhat better than its peers. The issue consists of fresh issue of 62.50 lakh shares and offer for sale of 13 lakh equity shares. The issue shall constitute 14.96% of the post-offer share capital of company.



P C Chacko

7 years ago

The history of the stock market during the last 5 decades shows that fresh pek always more than the previous peak Similarly bootom also always higher than the previous bottom The senses may cross 24000 by December 10 After that it may start sliding down

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