Indian equity markets recouped some losses but continued to trade well below the dotted line in the last two trading hours. Barring consumer durables all the sectoral indices are trading negative with banking and realty stocks being the biggest losers.
The BSE-Sensex is trading down 111 points and NSE-Nifty is trading down 50 points. BSE Mid Cap index and BSE Small Cap index are trading down by 0.6% and 0.3%, respectively. The rupee is trading at 55.6 to the US dollar.
All the public sector banking stocks are trading in red with Dena Bank and UCO Bank being the biggest losers. As per a leading financial daily, State Bank of India (SBI) will raise US$ 1-2 bn over the next three months through an overseas bond sale. The funds raised will enable the bank to enhance its Tier-II capital adequacy ratio. The bank's total capital adequacy ratio (CAR) stood at 13.9% in March 2012, with core Tier-I forming over 9%.
The bank, received a capital infusion of Rs 80 bn from the government at the end of FY12. SBI has said that its non-performing assets (NPAs) are under control and even on the profitability front; the banks performance in the first two months of FY13 exceeded the margin (NIM) target of 3.8% for the entire financial year.
The engineering stocks are currently trading mixed. Finolex Cables and Sanghvi Motors are the biggest gainers whereas BGR Energy and Shanthi Gears being the biggest losers. A leading business daily has reported that electrical goods maker Havells India is looking at investing about Rs 3 bn to Rs 5 bn over the next three years on various activities, such as expansions of plants, R&D works and launching new products. Capex in FY12 is envisaged at Rs 1 bn. Further, the company is targeting revenues of Rs 100 bn (including overseas businesses' revenues), and is looking at an overall growth rate of about 50%. In FY12, Havells clocked revenues of Rs 65 bn. The company's overseas operations contributed to about 46%.
The funding for the capex is expected to be through internal accruals. Havells has been on an expansion spree over the past three years, investing close to Rs 7 bn towards infrastructure at various locations. As per the management, cash flows from such investments are expected to flow in. Further, the company plans to expand its employee strength by 1,500 over the next two years in India as well as abroad. Currently, the company has about 6,500 employees on its payroll.