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

Personal finance Thursday

IDBI Federal launches Wealthsurance Milestone Plan

IDBI Federal Life Insurance has launched its new unit linked insurance plan (ULIP) called IDBI Federal Wealthsurance Milestone Plan. The Wealthsurance Milestone Plan has 13 investment options and seven insurance benefits. The Plan can be insured not only against risk of death, but also against 17 major diseases, hospitalisation, disability, accidental injuries etc.

Conservative customers can choose guaranteed return options which offer fixed, assured returns. Those who can take more risk can opt for capital protected options where the entry net asset value (NAV) is guaranteed and returns depend upon the market. Customers who would like to get potential high returns of equity markets in the long-term and understand the risk can opt for market linked equity options. Wealthsurance Milestone Plan offers an investment option called Asset Allocator Funds, where the company’s fund managers invest in equity or debt depending upon market conditions.

The insurance benefits offered by the Plan include Major Diseases Benefit in which lump-sum cash amount up to Rs20 lakh is paid upon diagnosis of any of 17 specified major diseases. These include heart attack, coronary bypass surgery, cancer, stroke, paralysis, coma, brain tumour, renal failure, major organ transplant etc. Another benefit is Hospital Cash Benefit in which daily cash benefit up to a maximum of Rs5,000 per day will be paid for each day of hospitalisation, irrespective of the amount actually spent. The claim process is simple since no bills have to be submitted but only proof of hospitalisation. Other benefits offered include accidental death and disablement benefit and waiver of all future premiums upon death or disablement. Premium contributions are eligible for tax deduction under Sec 80C. All benefits under the Plan are tax-free under Sec 10(10D).

Amish Tripathi, National Head–Marketing & Product Management, IDBI Federal Life Insurance says, “While Equity Growth Fund invests in listed stocks and aims to generate returns by picking stocks that have growth prospects in the long run. Asset Allocator Fund is designed to delegate the fund allocations decisions to our team of fund managers, who change the asset allocation to suit the market conditions.” He adds, “This unique fund also presents three options to the investors depending upon their risk profile i.e. Cautious, Moderate and Aggressive.”

The equity component is restricted, based on the risk profile chosen by the investor. Therefore, although Asset Allocator Funds are market linked, they are not compulsorily equity linked. These funds try to maximize returns of investors by actively choosing between debt and equity.

IDBI Federal also offers convenient and free switching between funds with no tax incidence. This means that customers can adjust their investment portfolios as their life stage changes, thus making Wealthsurance their investment partner for life.

IDBI Federal Life Insurance is a joint venture of IDBI Bank, Federal Bank and Ageas, a multinational insurance company.

ICICI Prudential Life launches ICICI Pru LifeLink Wealth SP

ICICI Prudential Life has launched ICICI Pru LifeLink Wealth SP. The Plan provides potentially higher returns over the long term, with a single premium. The minimum premium amount is Rs40,000 and the maximum age of entry is 60 years.
The Plan provides customers the flexibility to choose between 125% to 500% premium. It will give a loyalty benefit of up to 2.5% of the fund-value at the end of every fifth policy year, which will start from the 10th policy year. In addition to this, LifeLink Wealth SP also gives tax benefits on the premium paid and Change in Portfolio Strategy (CIPS), which means the customer is given an opportunity to choose from two unique portfolio strategies.

For passive customers, the product has Trigger Portfolio Strategy, which gives them the opportunity to automatically capitalise and protect gains made from equity investment based on market movement.

Kotak Mahindra Bank launches Click2Remit

Kotak Mahindra Bank has launched Click2Remit - an upgraded portal designed to help non-resident Indians (NRIs) to remit money to India in a convenient and cost-effective manner. Click2remit enables NRIs to remit in currencies like US dollars, British pounds, euros, Japanese Yen, etc through more than 65,000 branches of over 100 Indian banks across India. Click2Remit, with enhanced security to safeguard online transactions, is also available through Kotak Net Banking.

Click2Remit also offers the option of choosing guaranteed rates and there is no fee levied for transfers undertaken. NRIs can remit money to India through various transfer modes such as automated clearing house, bank transfer, wire transfer and cheque transfer. The new portal offers attractive foreign exchange conversion rates and low transaction costs. A service desk has been set up to provide prompt customer service.

Toyota Kirloskar Motor inks MoU with UCO Bank for auto loans

Toyota Kirloskar Motor has signed a Memorandum of Understanding (MoU) with the UCO Bank to extend auto retail finance to their customers. UCO Bank will be one of the preferred financiers for the entire range of vehicles sold by Toyota Kirloskar Motor. The tie-up will enable the bank to increase its car loan portfolio substantially. Thus, the bank's retail portfolio as well as customer base can be increased. Under the agreement, both Toyota Kirloskar Motor dealers and the Bank branches will source Toyota Car loan business using their customer database.

BSE starts mobile-based trading

The Bombay Stock Exchange has launched mobile-based trading through its 33 leading brokers. Leading BSE stock brokers namely, Angel Broking, Motilal Oswal Securities, Marwadi Shares & Finance, BCB Brokerage, Asika Stock Broking, Geojit BNP Paribas Financial Services, SMC Global Securities, ICICI Securities, India Infoline, Kotak Securities, Standard Chartered STCI Capital Markets are among those who started providing mobile-based trading facility to its clients. The mobile trading service will be extended to all the investors through its 900 active brokers soon. Mobile trading is an extension of Internet-based trading. The security on mobile trading will be same as on Internet trading.


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