Market is seen opening almost flat. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could gain 3 points at the opening bell.
In overseas stock markets, Asian stocks edged lower tracking overnight decline on Wall Street. US stocks closed lower yesterday, 7 April 2016, with financials leading declines on profit-taking in an overall risk-off environment ahead of earnings season.
Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 294.72 crore yesterday, 7 April 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 16.06 crore yesterday, 7 April 2016, as per provisional data.
Among corporate news, Hindustan Unilever (HUL) announced that it has completed the acquisition of Masons Group flagship hair oil brand Indulekha. The announcement was made after market hours yesterday, 7 April 2016. It may be recalled that in December 2015, HUL had announced signing an agreement with Masons Group for acquisition of its flagship Indulekha brand.
Tata Power announced after trading hours yesterday, 7 April 2016, that the Appellate Tribunal for Electricity (APTEL) has decided against providing compensatory tariff to the company's 100% subsidiary, Coastal Gujarat Power (CGPL). CGPL controls the 4,000 MW Ultra Mega Power Project (UMPP) at Mundra, Gujarat.
APTEL, while pronouncing the order, also remarked that Central Electricity Regulatory Commission (CERC) has no power to grant compensatory tariffs. However, APTEL, has thrown back the case to CERC. It has asked the commission to decide the tariff as per power purchase agreements (PPAs) and under 'force majeure' or 'change in law'. CERC has also been directed to conclude the exercise as expeditiously as possible, but certainly within a period of 3 months from 7 April 2016.
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The case was being fought in APTEL between Tata Power and Adani Power with state utilities of Gujarat, Rajasthan, Maharashtra, Punjab and Haryana. The three-year-old tariff pertains to pass through of cost escalation due to change in imported coal prices and regulations in the Indonesian coal market. Both Tata Mundra UMPP and Adani power plant run on imported coal.
In an order dated February 2014, CERC decided a compensatory tariff to be paid by the states procuring power to the two power companies with effect from the commissioning date of the units. The compensatory tariff was over and above the tariff agreed in the power purchase agreement.
Tata Power's Mundra UMPP in Mundra was awarded compensatory tariff at 52 paise per unit over the remaining life of the project.
Indian Oil Corporation (IOC) will be watched. Media reports suggested that IOC is looking at buying equity stake in Nagarjuna Group's six million tonnes a year Cuddalore refinery in Tamil Nadu. IOC, however, clarified after trading hours yesterday, 7 April 2016, that there is no such proposal under consideration by the company at present and the news item is speculative in nature.
Separately, Nagarjuna Oil Refinery clarified after trading hours yesterday, 7 April 2016, that various prospective investors, including public sector companies such as IOC have sought information on the project. These prospective investors have been provided with the information from time to time, it added.
IT, telecom stocks and index heavyweights HDFC and ITC led losses for the two key benchmark indices yesterday, 7 April 2016. The barometer index, the S&P BSE Sensex, fell 215.21 points or 0.86% to settle at 24,685.42.
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