Wockhardt stocks will be in focus as its Chikalthana plant at Aurangabad in Maharashtra has received a good manufacturing practice (GMP) certificate from the UK health regulator after an inspection. (Photo: PTI)

The BSE Sensex and NSE Nifty are expected to open on a flat note on Wednesday tracking global cues.  On Tuesday, Sensex closed 23.74 points up at 26,169.41, while Nifty closed 19.65 points up at 7954.90.

Below are the stocks that are likely to be in focus today:

Jyoti Structures: Lenders to the loss-making company have decided to convert Rs 307.6 crore of loans into shares at a value of Rs 26.90 apiece, a premium to the current market price, sources told FE. The move is part of a strategic debt restructuring (SDR), a scheme outlined by the Reserve Bank of India (RBI) earlier this year. The stock closed at Rs 17.70 on Tuesday on the BSE, down 6.84% from its previous close.

Wockhardt: In a major relief to drug firm Wockhardt, its Chikalthana plant at Aurangabad in Maharashtra has received a good manufacturing practice (GMP) certificate from the UK health regulator after an inspection.

Tata Motors: Tata Motors on Tuesday reported 6.71 per cent decline in sales at 38,918 units in November compared to 41,720 vehicles in the same month last year. Domestic sales of Tata Motors’ commercial and passenger
vehicles declined by 6 per cent at 35,345 units during the month as against 37,427 units sold in November, 2014.

Banking stocks: Bankers hint at lowering rates after Rajan’s push: Feeling the RBI heat for not passing on benefits of rate cuts fully to borrowers, bankers on Tuesday promised that borrowers can look forward to lower rates even as Governor Raghuram Rajan decided to keep rates on hold on Tuesday. “As the impact of monetary policy measures taken so far plays out in terms of bank funding costs, lending rates are expected to continue to moderate,” Chanda Kochhar, MD and chief executive of ICICI Bank, said in a statement.

TVS Motor: TVS Motor Company on Tuesday reported 2.43 per cent increase in total sales at 2,25,401 units in November. The Chennai-based company had sold 2,20,046 units in the same month last year. Total two-wheeler sales for the month grew 3.18 per cent to 2,17,706 units as against 2,10,979 units in November 2014, TVS Motor Company said in a statement.

Cox & Kings: UK Group Travel company Cox & Kings Group on Tuesday said it has sold 100 per cent shares of Explore Worldwide to Hotelplan UK Group for 25.8 million pounds. Cox & King sold 100 per cent of the issued and outstanding shares of Explore Worldwide through its Holidaybreak Plc subsidiary, the company said in a release.

Hero MotoCorp: Country’s largest two-wheeler maker Hero MotoCorp on Tuesday reported a marginal increase in sales at 5,50,731 units in November. The company had sold 5,47,413 units in the same month last year, Hero MotoCorp said in a statement.

TV Today Network Ltd: Reserve Bank has allowed foreign investors to invest up to 26 per cent in TV on Tuesday Network Ltd. “Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 26 per cent of the paid up capital of TV on Tuesday Network Ltd under the Portfolio Investment Scheme (PIS),” RBI said in a notification. As per data available on BSE, foreign investors held 0.02 per cent in TV on Tuesday Network as on September 30.

Coal India: State-owned Coal India’s production stood at 47.47 million tonnes in November, down by 4.42 per cent from the targeted output level for the month. In a regulatory filing, CIL said the actual coal production was 47.47 million tonnes in November this year, while the offtake was 45.33 million tonnes in the same month.

JSW Steel: Disappointed over a US court decision against its subsidiary, JSW Steel USA, Sajjan Jindal-led JSW Steel on Tuesday said it will defend its position under applicable laws.

HDFC: HDFC Ltd has invoked 1.5 lakh shares of United Spirits Ltd (USL) pledged by Vijay Mallya-led investment arm Kingfisher Finvest India Ltd. HDFC invoked the shares amounting to 0.10 per cent stake in USL on November 23, 2015, United Spirits Ltd (USL) said in a BSE filing.

ONGC and Reliance Industries: Stocks of theboth the companies will be in focus as US-based consultant D&M has submitted its final report on the gas dispute between ONGC and Reliance Industries, establishing that natural gas worth over Rs 11,000 crore has migrated from idling KG fields of the state-owned firm to the adjoining KG-D6 block.

Lenders to the loss-making Jyoti Structures have decided to convert Rs 307.6 crore of loans into shares at a value of Rs 26.90 apiece, a premium to the current market price, sources told FE. The move is part of a strategic debt restructuring (SDR), a scheme outlined by the Reserve Bank of India (RBI) earlier this year. The stock closed at Rs 17.70 on Tuesday on the BSE, down 6.84% from its previous close.

Lenders have 18 months from the date the SDR scheme is effective to find a buyer for the company. Should banks fail to usher in a new promoter, the asset would be classified as a non-performing asset.

RBI’s SDR guidelines allow banks to convert debt to equity at a value that is not less than its face value and banks are not required to show a mark-to-market loss or profit for SDR conversions.

The consortium of 21 lenders is led by State Bank of India (SBI). In FY15, the Mumbai-based company reported a net loss of Rs 396 crore on the back of Rs 3,111 crore in revenues and its interest expenses almost doubled to Rs 426 crore in FY15. In Q1 FY16, Jyoti Structures reported a net loss of Rs 152 crore owing to Rs 158 crore in interest costs.

Bloomberg data show that its FY15 gross debt was at Rs 2,356 crore, up from Rs 1,563 crore in FY14.

Jyoti Structures’ debt was restructured by a joint lenders’ forum (JLF) in September 2014. Headed by Prakash K Thakur as its vice-chairman, the company is promoted by KR Thakur (3.34%), Prakash K Thakur (4.51%), Valecha Infrastructure (4.96%) and Surya India Fingrowth (5.35%).

Following rules put out by the RBI in June, this year bankers have decided to try out a restructuring for a handful companies including Electrosteel Steels, Lanco Teesta Hydro Power, Monnet Ispat, Coastal Projects and IVRCL.

With the Reserve Bank of India keeping the key rates unchanged in its fifth bi-monthly policy on Tuesday, fund managers expect that investors are best suited to gain from investing in long-term bond funds and income funds having an investment horizon of 18-24 months. However, investors having short-term view should look at investing in medium-term funds, they said.

In the current calendar year, the repo rate has been reduced by 125 basis points (100 basis points = 1%) to 6.75%. Lakshmi Iyer, chief investment officer and head-products at Kotak Mahindra Asset Management Company said, “I think the announcement made by the Governor was in line with expectations and a balanced one. However given the scenario, we see low probability of rate cut in the current financial year. Having said that, I think the 10-year bond yields will come down by 25-30 basis points by the end of current financial year. We believe that duration funds are something which I  will recommend at this point of time.”

Prices of fixed income securities are governed by interest rates prevailing in the markets. Interest rates and prices of fixed income securities are inversely proportional. When interest rates decline, prices of fixed income securities increase. Similarly, when there is hike in interest rates, prices of fixed income securities come down.

On Tuesday, the 10 year benchmark government securities (G-Sec) yields closed at 7.72%. “As expected, the RBI left key interest rates unchanged and also maintained its accommodative stance, although it comes with a bit of caution. We thus hold our view that the next rate cut (25 bps) would be possible only post the Budget. With the RBI highlighting the impact of Pay Commission on the fiscal numbers, it would want to wait and see the markets’ response to the government’s ability to meet the 3.5% fiscal deficit target,” said Murthy Nagarajan, head of fixed income at Quantum Asset Management Company.

Fund managers, however, said going forward the market would be keenly watching the development from the Fed policy which might hike interest rates in US. “Though long-term products are attractive at this point of time,
but risk averse investors should continue to invest in short-term debt funds,” a debt fund manager said.

The RBI’s decision to keep the policy rates unchanged evoked mixed response for rate sensitive stocks on Tuesday. Sectoral indices for auto companies and banks closed in the red, while sectoral index for real estate scrips posted gains.

The BSE Bankex index closed 0.3% lower as shares of seven out of ten companies on the index closed in the red. Axis Bank was the biggest loser during the session as shares of India’s third-largest private bank declined 1.54%. Scrips of Bank of Baroda and YES Bank fell 1.36% and 0.85%, respectively. The BSE Reality index closed 0.27% higher. Shares of Unitech and DLF added 2.4% and 2.26%, respectively.

“The market remained range bound amid RBI’s decision to maintain the status quo. RBI kept the key rates unchanged in order to curtail the targeted CPI at 6% by January 2016,” said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services, adding that investors are awaiting global triggers.

Notwithstanding RBI Governor Raghuram Rajan’s remarks on optimistic outlook on auto sector especially in the passenger cars segment, majority of auto scrips closed in the red. The poor investor sentiment was due to lower than expected November sales for Maruti Suzuki, Eicher Motors, Mahindra & Mahindra and Ashok Leyland. The BSE Auto index declined nearly 0.6% on Tuesday. Shares of Eicher Motors fell 2.94%, while Tata Motors and Ashok Leyland lost 1.4% and 1.2%, respectively.

After falling over 2 per cent on Monday, Bharti Airtel extended losses on Tuesday with its share price plunging 3.53 per cent after Standard & Poor’s kept rating of the telecom major unchanged (PTI)

After falling over 2 per cent on Monday, Bharti Airtel extended losses on Tuesday with its share price plunging 3.53 per cent after Standard & Poor’s kept rating of the telecom major unchanged post the company’s plan to spend Rs 60,000 crore over the next three years. The rating agency anticipates that the investment will slow down the improvement in Bharti’s financial ratios.

The share price of the company closed at Rs 322.70, after touching an intraday high and low of Rs 336 and Rs 321.30.

The S&P said it expects the company’s ratio of funds from operations (FFO) to debt to consistently stay above its downgrade trigger of 20 per cent. “We estimate Bharti’s ratio of FFO to debt will reach 25 per cent in fiscal 2018, compared with our earlier expectation of 30 per cent from 21 per cent in fiscal 2015,” it agency said.

The revised capital expenditure and possible new spectrum acquisition, though discretionary, could result in Rs 15,000 crore of additional cash outflow compared with its earlier expectations

The agency further said it expects competition in India’s telecom sector to intensify over the next one to two years following the entry of Reliance Jio.

(With inputs from PTI)