HDFC has agreed to pick up a stake, worth Rs50 crore, in Indus World Schools
Mortgage provider Housing Development Finance Corp (HDFC) has agreed to pick up a stake in Indus World Schools for Rs50 crore, a chain promoted and run by Career Launcher (CL), a diversified education company in India. Gaja Capital Partners, a private equity firm, is an existing investor and is co-investing in this round.
Gopal Jain, managing partner, Gaja said, "Education and housing are core needs of India's emerging consumers. This partnership between two sector leaders will leverage complementary strengths to help address the huge and immediate unmet demand for K12 education from India's quality seeking consumers."
On Wednesday, HDFC ended 3.16% up at Rs609.55 on the Bombay Stock Exchange, while the benchmark Sensex declined 1.03% to 17,592.77 points.
After four days of decline, a bounce is likely in the Nifty till 5,350 and Sensex till 17,900
The market opened lower following news that a top executive of a Mumbai realty company was arrested by the CBI in connection with the 2G spectrum allocation scam. Political implications about the scam kept investors edgy throughout the session with the indices hovering on both sides of the neutral line. The broader markets were also hammered for a second day today.
Heavy sell-off by institutional investors in the late session took the market to the day's low, but a recovery in the dying moments of trade helped to cut the losses.
As expected, stocks opened on a pessimistic mode. The Sensex and the Nifty had a negative opening at 17,724 and 5,293. However, after the market quickly hit the lows in the first half hour, there was a strong revival; the indices made up the day's losses and were in the green intermittently. However, sellers took over in the last two hours, following rumours about action against Anil Ambani group companies, sending the Nifty to the day's low of 5,223 and the Sensex to 17,500. The silver lining for the bulls is that there was a significant fightback in the last half hour of trading, when the Nifty revived by as much as 50 points from the day's low.
With today's fall, the market has declined for four days in a row. Also, the fall over these four days amounts to 331 points on the Nifty and 1,042 points on the Sensex. In the two previous rounds of decline, the Nifty fell by 399 and 483 points and the Sensex by 1,359 points and 1,661 points. If today's lows hold, there is a chance that bulls will enjoy a sharp rally. Whether it is a temporary one, we don't know now. The advance-decline on the NSE was a poor 173:1519.
The market breadth on the key benchmarks was negative today. The Sensex settled with 22 losers and eight gainers while the Nifty had 36 declining stocks and 14 in the green. The broader markets were also pummelled today. The BSE Mid-cap index tanked 3.64% and the BSE Small-cap index plunged 4.30%.
The sectoral space had no green ticks. The BSE Power index (down 4.23%) was the top loser, followed by BSE Metal (down 3.87%), BSE Realty (down 3.81%), BSE Consumer Durables (down 3.57%) and BSE Capital Goods (down 2.58%).
The top performers on the Sensex were Mahindra & Mahindra (up 4.06%), HDFC (up 3.16%) and DLF (up 1.13%). The laggards were led by Reliance Infrastructure (down 18.79%), Reliance Communications (down 14.32%) and Jaiprakash Associates (down 10.68%).
Virtually in line with the estimated loss pointed out by the Comptroller and Auditor General in the 2G spectrum allocation, the Telecom Regulatory Authority of India (TRAI) today recommended a hike in the price of 2G spectrum to about six times the existing rates. The revised prices should be made applicable with effect from 1 April 2010 on a pro-rata basis depending upon the number of years left for licences to expire, TRAI said, and added that any licence coming up for renewal would have to pay for spectrum based on this new price.
The Asian pack settled with deep cuts following a hike in key interest rates announced by the Peoples Bank of China yesterday. Analysts opine that China has taken a serious note of rising inflation and will not hesitate to implement harsher measures to curb liquidity. Investors will now fix their focus on South Korea, whose central bank is expected to announce monetary policy decisions on Friday.
The Shanghai Composite declined 0.92%, the Hang Seng tanked 1.36%, the Jakarta Composite tumbled 1.23%, the KSLE Composite fell 0.23%, the Nikkei 225 shed 0.17%, the Straits Times lost 1.09%, the Seoul Composite declined 1.17% and the Taiwan Weighted was 1.15% lower at the end of trade today.
Back home, foreign institutional investors were net sellers of stocks worth Rs726.54 crore on Tuesday, while domestic institutional investors were net buyers, purchasing equities worth Rs448.97 crore.
Hero Honda Motors (down 4.86%), India's largest two-wheeler manufacturer, is reportedly looking to buy 800 acres in Aurangabad, on an estate of the Maharashtra Industrial Development Corporation (MIDC), for a manufacturing unit. The company got government approval on 1 February 2011 for this. This would be Hero Honda's first facility outside north India and is being perceived as a step towards improving its show in the western markets.
Leading packaging firm Uflex (down 13.69%) today said it will set up a plant in Wrzesnia, Poland, with an investment of $80 million (around Rs360 crore), which is expected to become operational in June 2012.
The company stated that it has almost completed the land acquisition process and added that the plant will have a capacity of about 30,000 tonnes. The investment will be made partly from debt and partly from internal accruals, Uflex stated.
Tata Consultancy Services (TCS) (down 2.70%) has entered into five-year contract with du, an integrated telecom service provider in the United Arab Emirates (UAE). As an IT-managed services partner, TCS will support du in its effort to enhance customer excellence and service delivery levels.
According to the rumours in the market, the promoter of Swan Telecom, which is alleged to have a hand in the 2G scam, is believed to be close to Anil Ambani. An ADAG spokesperson, however, has denied that the company is involved
The stock prices of various listed companies of the Anil Dhirubhai Ambani Group (ADAG) companies fell by more than 10%-20% today, following rumours that executives of the group would be questioned-or even arrested-as part of the the government crackdown on the investigation of the 2G scam, where former union telecom minister A Raja along with his two executives were also arrested.
By the end of the day, all the stocks of the Anil Ambani group companies crashed. Among the worst hit was Reliance Infrastructure, which fell by more than 15%. It fell by 18.79% to Rs534.70 on the Bombay Stock Exchange (BSE).
Reliance MediaWorks was down by 16.11% to Rs129.90, Reliance Communications (RCom) Ltd collapsed by 14.32% and Reliance Capital by 14.05% at Rs412.90.
Reliance Power Ltd was down by 8.93% to around Rs113.15 on the stock exchange. Meanwhile, the benchmark index Sensex fell by 182.93 points.
The arrest of the managing director of DB Realty Shahid Usman Balwa was in connection with the 2G spectrum allocation, where Mr Balwa was allegedly channelling bribes paid to the former telecom minister to secure 2G spectrum.
He is also said to have helped Mr Raja park the money in the real estate business. Central Bureau of Investigation (CBI) sources say they have evidence from the Income-Tax Department in this regard.
DB Realty floated Swan Telecom, which allegedly was helped by Mr Raja to get 2G licences in 13 circles-including Mumbai and Delhi-for Rs1,537 crore. Within months of getting the spectrum, Swan sold 45% of its shares to UAE telecom giant Etisalat for about Rs4,500 crore.
DB Realty has a debt of Rs4 billion on its books, that includes a Rs1.9 billion loan, again from LIC Housing Finance. The company has said that it does not have any direct or indirect shareholding in Etisalat DB Telecom (originally Swan Telecom) and that promoters of DB own around 45% in Etisalat DB.
According to the rumours in the market, the promoter of Swan Telecom is believed to be close to Anil Ambani. This took a heavy toll on the stock prices of ADAG companies.
Reliance Communications is being probed in the 2G scam, along with Unitech, Tata Teleservices, Shyam Telelink (now Sistema Shyam Teleservices) and Swan Telecom (now Etisalat DB Telecom), which have sold stakes in their wireless ventures at significant premiums after they were allocated spectrum. RCom had issued a clarification, saying it owned a 10% stake in Swan Telecom until December 2007 but that it didn't hold a stake in Swan when the license was granted in 2008.
Last week, the CBI accused Swan, which has since been renamed Etisalat DB, and Unitech of buying mobile licences at unfairly cheap prices. Unitech's joint venture Unitech Wireless is majority held by Norway's Telenor.
According to a release late evening from a Reliance ADAG spokesperson, "A series of completely baseless and motivated rumours have been spread today by our unscrupulous corporate rivals. This has been accompanied by vicious and illegal bear hammering of our listed stocks, to create panic and destabilise the markets. We have made a formal complaint to SEBI and the stock exchanges to immediately investigate these illegal trades, and take appropriate action to safeguard the interests of our over 11 million investors."