Lanco had Rs 33,000 crore debt as on March 31, 2015. According to the release, the big asset sale program/ divestment program is getting delayed due to overall market conditions. (Express Photo)

After surging over 10 per cent on Tuesday, shares of Lanco Infratech jumped over 8 per cent in the morning trade on Wednesday following reports that the company may sell power projects having a capacity of 3,000 MW from 2018 onwards and expects to get Rs 25,000 crore, which would help pare debt and also infuse fresh capital into the group.

At 10.09 am, share of Lanco Infratech were trading 8.45 per cent up at Rs 4.49. The scrip opened at Rs 4.25 and had touched a high and low of Rs 4.54 and Rs 4.25, in trade so far. Sensex was up 0.79 per cent at 25,982.

In a clarification note, the company in a BSE filing on September 29, said, “The company has been communicating to the stock exchange and also to the shareholders/ general public that the company is keen in selling its stake in some assets of the company which is as per the CDR package and subsequent JLF approvals, to reduce the debt burden and to bring liquidity into the company.”

Company has already sold 2 of its assets namely Udupi Power Corporation Ltd (1200 MW Thermal Power Project) and Lanco Budhil Hydro Power Private Ltd (70 MW Hydro Power Project), which reduced the consolidated debt of the company.

Lanco had Rs 33,000 crore debt as on March 31, 2015. According to the release, the big asset sale program/ divestment program is getting delayed due to overall market conditions.

For the quarter ended June 2015, the company reported consolidated net loss of Rs 300.36 crore against net loss of Rs 306.35 crore in the corresponding quarter a year ago.

(With inputs from PTI)

Hero MotoCorp stocks will be in focus as the country’s largest two-wheeler maker unveiled two indigenously developed scooters — Duet and Maestro Edge — which will hit the market by the middle of next month. (Express Photo)

The BSE Sensex and NSE Nifty opened on a positive note on Wednesday following firm global cues amid a rate cut of 50 bps by the Reserve Bank of India in its monetary policy review on Tuesday. At 9.20 am, Sensex was up 264.63 points at 26,043.29. Similarly, Nifty was up 67.65 points at 7,910.95 during the same time.

Stocks that are likely to be in focus today

Shree Renuka Sugars: The stocks of the company will be in focus after its said that its Brazilian subsidiary filed for bankruptcy protection as its operations were hit by a crash in sugar prices in the last two years.

TCS: The IT major on Tuesday announced a new partnership with a British mutual financial institution for providing a neural automation system which automates and optimises IT operations and processes of an enterprise.

Hero MotoCorp: Country’s largest two-wheeler maker unveiled two indigenously developed scooters — Duet and Maestro Edge — which will hit the market by the middle of next month.

State Bank of India: Country’s largest lender slashed minimum lending or base rate by 0.4 per cent to 9.3 per cent, setting the trend for benign interest rate regime.

Sun Pharma: The drug major has made a tender offer to acquire US-based eyecare firm InSite Vision for $0.35 per share in cash.

NMDC: State-owned NMDC Ltd plans to invest Rs 40,000 crore in the next eight years to reach a target of 100 million tonnes per annum of iron ore production from the current levels of little over 30 MTPA.

Reliance Industries (RIL):  Reliance Jio Infocomm has raised Rs 3,500 crore by issuing non-convertible debentures through private placement.

Eveready: Reserve Bank on Tuesday allowed foreign investors to invest up to 49 per cent stake in Eveready Industries India Ltd under the Portfolio Investment Scheme.

The BSE Sensex and NSE Nifty on Wednesday are poised for a positive start tracking SGX Nifty and firm global cues. (Express Photo)

The BSE Sensex and NSE Nifty on Wednesday are poised for a positive start tracking SGX Nifty and firm global cues. A 50 basis points repo rate cut by the Reserve Bank of India in its monetary policy review on Tuesday also lifted market sentiments.

At 8.22 am (IST), SGX Nifty was up 30 points, or 0.38 per cent, at 7,881.

Asian stocks took an early positive lead from Wall Street, which ended slightly higher overnight as the US bourses took a breather, with the latest round of China fears that gripped global markets petering out for the moment. Investors also felt relief as shares of mining and trading giant Glencore gained more than 10 per cent overnight.

Hang Seng, Nikkei and Shanghai were up 0.94 per cent, 1.84 per cent and 0.38 per cent at 20749.60, 17243.21 and 3049.68, respectively.
Dow Jones Industrial Average gained 0.30 per cent at 16049.13 on Tuesday.

Back home, key benchmark indices cheered on a rate cut by the RBI on Tuesday. As a result, BSE Sensex and NSE Nifty closed 161.82 points and 47.60 up at 25,778.66 and 7,843.30, respectively.

Vinod Nair, head, fundamental research, Geojit BNP Paribas Financial Services, said, “The surprising act of the RBI is largely guided by the Fed’s decision to hold US rate hike for now. It was also influenced by additional factors like lower trajectory of CPI and strong control in food inflation. The CPI continues to remain below the RBI’s expectation while food inflation has been better managed in spite of the risk of monsoon deficit, under the supervision of the government. On a very healthy note the RBI will continue to be dovish increasing the possibility to have further cut in interest rate by the earlier part of 2016.”

The RBI on Tuesday announced an increase in the foreign portfolio investment (FPI) limit in government securities in a phased manner, which is set to reach 5% of the outstanding stock by March 2018, thereby opening up an additional Rs 1.2-lakh-crore investment limit over the next two-and-a-half years.

The central bank also added that the limits for FPI investment in debt securities will henceforth be announced/ fixed in rupee terms. As of now, the existing FPI investment limit in G-Secs is Rs 1.53 lakh crore or $30 billion.

Moreover, the RBI permitted FPI investments in state development loans (SDLs), which will be increased in phases to a figure of 2% of the outstanding stock by March 2018. “This would amount to an additional limit of about R500 billion (R50,000 crore) by March 2018,” the release said.

It means that over the next two-and-a-half years, cumulative FPI investment limits into G-Secs and SDLs will be close to double the current limit of $30 billion allowed in G-Secs. Bankers are optimistic that foreign investor appetite for Indian papers will continue to remain robust.

Ananth Narayan, regional head of financial markets, South Asia at Standard Chartered, said currently, there is a definite appetite for Indian government bonds. “Rupee has been among the most stable currencies in the world over the past two years or so, and yields on rupee are still relatively high compared to global peers,” Narayan said.

He pointed out that as foreign holding in government debt increases to 5%, the need to ensure inclusion of Indian government bonds into global indices increases.

“Unlike Indian equity, Indian debt are off global indices, which could lead to volatility in debt flows.  There are solutions that achieve this index inclusion without compromising the objectives of the authorities, and these must be pursued,” he said.

According to the policy statement, the limits for the residual period of the current financial year would be increased in two tranches from October 12, 2015, and January 1, 2016. Each tranche would entail an increase in limits by Rs 13,000 crore for central government securities composed of Rs 7,500 crore for long-term investors and Rs 5,500 crore for others; and R3,500 crore for SDL open to all FPI investors.

“The appetite for SDLs can be mixed, since they do not come with an explicit sovereign guarantee. But again since the liquidity in SDLs is far better than corporate bonds, I think FPI appetite for this segment will be reasonable,” Narayan said. However, this might prove to be a dampener to FPI interest in corporate bonds that already is seeing a drag since the beginning of this fiscal year.

“Since the investment limit in government securities has been increased, corporate bonds may see a (relative) reduction in FPI interest due to the liquidity factor in G-Sec market,” said Manmohan Singh, head of debt capital markets, India and South East Asia at RBS.

The increase in limits will be announced every half year in March and September and released every quarter.

The apex bank also said it has been decided to permit Indian corporates to issue rupee-denominated bonds with a minimum maturity of five years at overseas locations within the ceiling of foreign investment permitted in corporate debt ($ 51 billion at present). There shall be no restriction on the end use of funds except a small negative list and detailed instructions are being issued separately.

Mutual fund managers continued to maintain bullish stance on software companies, as they raised their total allocation in the sector to an all time-high of over Rs 40,500 crore in August due to depreciation in rupee.(Thinkstock)

Mutual fund managers continued to maintain bullish stance on software companies, as they raised their total allocation in the sector to an all time-high of over Rs 40,500 crore in August due to depreciation in rupee.

In comparison, equity fund managers deployment in software stocks stood at Rs 29,668 crore during August last year.

Industry experts said that fund managers raised their allocation to software stocks due to declining rupee against the US dollar.

Like exporters, IT companies earn majority of their revenue in dollars. Depreciating rupee means exporters get more rupee per US dollar.

As per the data available with Securities and Exchange Board of India (Sebi), overall deployment of equity funds in software stocks stood at Rs 40,602 crore in August compared with Rs 38,404 crore in the previous month.

Besides, exposure to software stocks was at 10.27 per cent in August against 9.40 per cent in the preceding month.

Furthermore, IT was the second-most preferred sector with fund mangers after banks.

However, fund managers have reduced their exposure in traditional investment sectors like banking stocks. Deployment of equity funds in banking stocks dropped to Rs 81,634 crore from Rs 85,329 crore during the period under review.

Among others, MFs have an exposure of Rs 33,170 crore in pharmaceuticals, followed by auto (Rs 27,912 crore) and finance (Rs 23,015 crore).

Indian rupee fell by Rs 2.35 during the period under review. The domestic unit is trading at 66.37 against dollar.

The BSE IT index grew 1 per cent per cent last month, while the BSE Sensex crashed by 6.5 per cent.

MFs are investment vehicles made up of a pool of funds collected from a large number of investors and invest in stocks, bonds and money market instruments, among others.