The BSE Sensex and NSE Nifty opened flat with negative bias tracking mixed global cues. (Photo: PTI)

10.14 am: The benchmark BSE Sensex was down over 75 points in early trade on profit booking by investors in recent gainers despite positive macroeconomic data. Brokers said sentiment turned weak despite industrial production grew at a nearly three-year high of 6.4 per cent in August on account of improvement in manufacturing as well as
mining activity and better offtake of capital goods. Nifty was down 19 points at 8,123.

9.45 am: Sensex slipped further 99.62 points at 26,804.49. Nifty was down 25.95 points at 8,117.65.

9.24 am: Sensex was down 25.95 points at 26,878.16. Nifty was down 3.10 points at 8,140.50. Cox & Kings shares were trading 2.67 per cent up at Rs 253.65 apiece. The Cox & Kings Group has acquired 100 per cent of the issued and outstanding shares of Late Rooms (UK) (Late Rooms) for GBP 8.5 million. The acquisition fits the group’s strategic intent to expand its global online and B2C leisure proposition.

Domestic equity markets opened flat with negative bias tracking mixed global cues. Sensex opened 29.82 points down at 26,874. Nifty opened 21.65 points down 8,121.95.

Hindalco,Vedanta and Infosys were down over 2 per cent in the early trade.

Retail inflation also rose to 4.41 per cent in September due to costlier food items in general and beverages and pulses in particular. The Consumer Price Index (CPI) based inflation in August stood at 3.74 per cent on cheaper vegetables, fruits and protein rich items, government data showed on Monday.

Sensex and Nifty slid 0.65 per cent and 0.56 per cent at 26,904.11 and 8,143.60 on Monday. Foreign portfolio investors (FPIs) bought shares worth a net Rs 317.56 crore on Monday, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 175.07 crore, as per provisional data.

IT major TCS will announce its second quarter earnings on Tuesday.

Global Markets

New York: Gains in utilities offset a retreat in energy shares on Monday, leaving US stocks slightly higher as investors remained nervous about third-quarter corporate results.

London: Britain’s top share index fell on Monday after posting its biggest weekly gain since 2011 in the previous session, weighed down by mining and aerospace stocks.

Tokyo: Japan’s Nikkei share average fell on Tuesday morning as profit-taking from last week’s gains hit home and oil-related stocks were sold on lower oil prices.

(With inputs from agencies)

Maintain ‘buy’ Motherson Sumi Systems, but reduce target price to Rs 340 (earlier Rs 355). We believe MSSL is a key beneficiary of increasing auto demand in India given its dominant position in India’s wiring harness market. We expect strong revenue growth and margin expansion in SMR and SMP businesses, driven by a strong order book. We, however, reduce our EPS for FY16 and FY17e 7% and 5%, respectively, as we now build in a more conservative margin improvement trajectory for the SMR and SMP businesses. We expect SMR/SMP ebitda margins (IFRS) to improve from 9.8% and 5.6% in FY15 to 11% and 7% by FY17 versus 12% and 8% previously.

We believe Motherson’s global business should continue to trade at the higher end of the space, given the strong medium term growth outlook and management’s strong ability to add value through acquisitions. We roll forward our price target by three months.

In our downside case, we assume SMR (mirrors) and SMP (polymers) business revenues to grow at 10% CAGR over FY16-18 and expect no ebitda margin improvement for these as well as the India business from FY15 levels. We get an EPS of Rs 10.58 and 12.5 for FY17e and FY18e respectively. Thus in our downside case the stock is trading at 23x FY17e P/E, which does not seem unreasonable for the 24% EPS CAGR over FY15-18e.

Infosys shares declined nearly 4% on Monday as the company lowered its FY16 dollar revenue guidance range to 6.4-8.4% from 7.2-9.2%. Infosys, however, retained its constant currency revenue guidance for FY16 at 10-12%. The scrip closed at Rs 1,122.50 on BSE – down Rs 45.35, or 3.88%.

In a volatile session of trading, shares of Infosys – India’s second-largest IT company — started on a positive note as the stock hit its 52-week high on both BSE and NSE. A total of 1.64 crore shares changed hands across the stock
exchanges – four times the three-month daily average of 44.6 lakh.

During the quarter ended September, Infosys’ net profit rose 12.1% sequentially to Rs 3,398 crore while the rupee revenue went up 8.9% to Rs 15,635 crore. On the other hand,  dollar revenue climbed 6 % to $2.392 billion, making it the steepest climb in 16 quarters.

The overall financial performance of the company continues to look good and IT stocks will recover in the near term, said an analyst with a domestic brokerage firm requesting anonymity, adding that Infosys has seen a great improvement in aspects like attrition rates of its employees. For the quarter ended September 30, Infosys
reported an annualised standalone attrition rate of 14.1% – down nearly 700 bps year-on-year.

The decline of Infosys shares dragged other IT scrip as the BSE Teck index closed 117.39 points, or 1.87%, lower. In the IT universe, shares of TCS – India’s largest IT company – lost 1.21% while shares of Wipro lost 1.24%.

Shares of HCL Technologies, however, closed 0.7% higher. During last week, HCL Technologies issued a revenue warning for Q1FY16. In a filing to the stock exchanges, the company said it expects a tepid US dollar revenue growth during Q1 due to negative forex impact of 80 bps, a slowdown in the infrastructure management services (IMS) segment due to transition issues and client-specific issues in a public services application development and maintenance (ADM) project, which should lead to a provision of $20 million.

The IT scrips have outperformed the benchmark indices during the current calendar so far. The sectoral index for IT shares on BSE gave more than 5% yields during the year against -2.2% returns by Sensex. Brokerages continue to sound bullish about the prospects of IT scrips.

Switzerland-based investment banking firm Credit Suisse said in a note to investors that Q2FY15 earnings for IT companies would be positive. “September 2015 is likely to be a strong quarter for most Indian IT firms due to seasonal strength and favourable moves in the key currencies like dollar. We believe that the demand environment remains stable and this quarter’s underlying growth trends may reflect the same,” said Anantha Narayan director-equity research, Credit Suisse, in the report.

Tackling black money growth is not the task of Sebi but it is pro-active in curbing market manipulations and information about tax evasion that comes to its notice is passed on to the authorities concerned, its chief U K Sinha said today.

“Anybody who says that it is the primary responsibility of Sebi to check evasion of tax, I think they are completely misplaced. Sebi’s job is to protect the interest of investors and see that market is not manipulated,” the Sebi Chairman said here.

In recent times, there have been rising concerns over illegal fund flows in the system and there have been instances that came to the notice of Sebi where stock market was used to carry out illicit money transactions.

“Tackling growth of black money or collecting revenue is not Sebi’s task. There are agencies in the country who are being paid for this job.

“You should appreciate that of all the agencies in the government Sebi is the first one which has by way of doing its normal duty of checking the manipulation of the market also come across an instance were tax was evaded. Sebi has passed on this information to the authorities,” Sinha noted.

Participating at an event organised by industry body PHD Chamber, Sinha said that Sebi started surveillance system on its own.

“Nobody asked us to do it. It is a completely wrong impression that somebody asked Sebi to do the checking. We did it on our own,” he added.

Citing an instance, Sinha said two or three years back, change in the unique plan code was one method through which market manipulation was happening and perhaps the riding idea was to evade tax.

“Sebi took that action to check frequent changes in the unique plan code and then passed on the information to the tax authorities and they have to do the job now,” he said.

Responding to a query on apprehensions that Participatory Notes (PNs) are being misused, Sebi chief said the regulator has all the data about entities who are using PNs.

People are perhaps missing out that from participatory notes system of 3-4 years back, there is a huge difference today, he noted.

“Today we have got all the data about who are the participants in the participatory notes, who can issue it, who can subscribe to it, all that is very well documented.

“If you are living in the past…you are refusing to accept the reality of changes that Sebi has been able to bring about in the last four years,” Sinha said.

The first half of the ongoing financial year (2015-16) has ended with a mobilisation of Rs 4,950 crore through initial public offerings. (Express Photo)

The first half of the ongoing financial year (2015-16) has ended with a mobilisation of Rs 4,950 crore through initial public offerings (IPOs), with another Rs 12,916 crore raised through the Offer for Sale through Stock Exchange mechanism (OFS), according to Pranav Haldea, Managing Director of PRIME Database.

This represented a near 5-time increase from the corresponding period of the preceding year in which only Rs 1,017 crore was mobilised. By number, the period witnessed 39 IPOs compared to 25 in the corresponding period of the preceding year. Of the 39, there were 12 main board IPOs mobilising Rs 4,777 crore (or 97 per cent of the amount) with the balance 27 being SME IPOs mobilising a small Rs. 173 crore.

The largest main board IPOs were of UFO Moviez (Rs 600 crore) and Navkar Corp (Rs.600 crore) while the largest SME IPO was that of Amrapali Fincap (Rs 40 crore).

According to Haldea, the high OFS amount is solely due to the government disinvestment programme with Rs 12,733 crore out of Rs 12,916 crore (or 99 per cent) being raised in the OFS of REC (Rs 1,610 cr), PFC (Rs 1,673 cr), DCIL (Rs 53 cr) and IOC (Rs 9396 cr). Haldea added that it is extremely positive to see action on the divestment front in the first half of the fiscal, a period where traditionally small amounts have been raised by the Government in the last several years. This is the highest amount ever raised in the first half through Government disinvestment, the next highest being Rs. 4,035 crore raised in 2009-10.

In all, there were 7 OFS (previous corresponding period 15), which mobilised Rs 12,916 crore (previous year Rs 2,593 crore). The largest OFS was of Rs 9,396 crore (Indian Oil).

Amounts raised through equity offerings in the first half of the last 10 years are as follows:

Source: PRIME Database

According to PRIME Database, only 16 per cent of the total amount raised in the first half (or Rs 2,918 crore) was raised through fresh capital, which typically goes into creation of productive assets, while the remaining Rs 14,949 crore was raised through offers for sale where the proceeds go to the sellers-government, promoters, venture funds and other investors and not to the company.

In terms of the method of offering, all 12 of the main board IPOs, as per PRIME, were through the book building route, with balance 27 SME IPOs issues through the fixed price method. The facility of anchor investors was used by 10 companies.

As per Haldea, even though a general positive sentiment has prevailed in the market, we are yet to see large IPOs hitting the market. The pipeline though looks promising. At present, 19 companies planning to raise Rs 11,545 crore are holding SEBI approval and another 17 companies intending to raise Rs 6,795 crore have filed with SEBI and are awaiting approval.