• Indian stock market and companies daily report (October 08, 2015, Thursday)

    Indian markets are expected to open in negative tracking the SGX Nifty and the Asian cues.

    U.S. stocks fluctuated over the course of the trading session on Wednesday but largely managed to maintain a positive bias on the day. Market were positive on Wall Street was partly in reaction to strength in the overseas markets, as stocks in Asia and Europe moved mostly higher. Trading activity was somewhat subdued, however, as traders seemed somewhat reluctant to make any significant moves amid a lack of major U.S. economic data.

    The European markets pared their gains in late trade Wednesday, but extended their recent winning streak to a fourth session. The recent gains continued to be fueled by strength in energy and mining stocks. Commodity prices have been rising since the start of the trading week.

    The Indian markets posted modest gains on Wednesday as positive cues from Asia and Europe coupled with hopes that the government would roll out a new goods and services tax (GST) in 2016 helped investors signal off the IMF's revised downward forecast for global economic growth.

    IL&FS Transportation Networks Ltd - Rights Issue at '90/share

    IL&FS Transportation Networks Ltd. (ITNL) has announced that it would be pursuing a Rights issue of shares, to be priced at '90/share. The record date for the issue is Oct 15, 2015. As per the issue, the existing shareholders in the company will be entitled to subscribe to 1 additional share, for every 3 shares held in the company. The issue will result in dilution of equity by 25% and raise '740cr for the company.

    Considering (1) rising debt to equity levels (4.21x as of 1QFY2016-end), (2) huge order book of '157,908cr (as of 1QFY201 6-end) to be executed over the next 24 months, and (3) equity funding requirements of ~'557cr (excludes equity requirement of recently won BOT projects), ITNL was left with few options, but to purse this '740cr Rights Issue.

    On successful completion of the issue, the consol. D/E ratio would decline to 3.7x. We believe the issue will address only the near-term fund requirements of the company while the company would still have to contemplate upon meeting its longer term fund requirements. We wait to get more insights on Management's long-term strategy to grow its business. Till then, we continue to maintain our NEUTRAL rating on the stock.

    Sobha's Q2 sales bookings down 11% at '495cr

    Sobha Ltd has reported over 11% decline in sales bookings at '495 cr during the september quarter versus '559 cr in the year-ago period mainly due to lower realisation. In terms of volume, sales bookings rose to 8,50,329 sq ft versus 8,33,991 sq ft during same quarer last year. However realisation price fell to '5,822 per sq ft from '6,703 per sq ft in the year-ago period. Factors such as falling interest rates, a growing economy, increased absorption in the commercial real estate space and the approaching festive season are expected to be decisive factors for an uptick in the real estate demand. The company is cautiously hopeful of meeting its FY2016 guidance on expectation of revival in investor sentiments.

    Economic and Political News

    - Govt should allow FDI in multi-brand through PPP: Assocham

    - Singareni coal production rises 27% in 6-month period

    - Govt to engage private cos for '1,438cr mechanisation at Paradip port

    Corporate News

    - Punj Lloyd enters transmission, distribution segment

    - Redington to acquire Turkey based Linkplus

    - Snapdeal announces investment of $20 million in logistics start-up Gojavas

    Contributed by Angel Broking
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