Key benchmark indices skidded in early trade tracking weakness in Asian stocks. At 9:25 IST, the barometer index, the S&P BSE Sensex was down 187.55 points or 0.67% at 27,903.87. The Nifty 50 index was currently down 56.70 points or 0.65% at 8,634.60. The Sensex dropped below the psychological 28,000 mark. Bank stocks led losses on the bourses.
In overseas stock markets, Asian stocks dropped following in the footsteps of lower closing for US stocks overnight, which pulled back on disappointing earnings.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 812 shares fell and 611 shares rose. A total of 82 shares were unchanged. The BSE Mid-Cap index was currently down 0.17%. The BSE Small-Cap index was currently down 0.12%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
Asian Paints shed 1.84%. The company said that its board of directors approved the scheme of amalgamation of Asian Paints (International) Limited, Mauritius, wholly owned subsidiary of the company with Asian Paints. The announcement was made after market hours yesterday, 25 October 2016. The scheme will come into effect subject to the approval from the stock exchanges, Bombay High Court and such other statutory authorities as may be required in India and Mauritius. It may be noted that the proposed scheme has been reviewed and recommended for approval by the Audit Committee of the Board of the company at its meeting held on 24 October 2016.
HDFC shed 0.56% ahead of its Q2 results today, 26 October 2016. Hero MotoCorp rose 1.03% ahead of its Q2 results today, 26 October 2016. Hindustan Unilever (HUL) declined 0.13% ahead of its Q2 results today, 26 October 2016. ITC fell 0.21% ahead of its Q2 results today, 26 October 2016.
Axis Bank slumped 7.2% after net profit declined 83.34% to Rs 319.08 crore on 14.14% growth in total income to Rs 13698.77 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 25 October 2016. Axis Bank's net interest income (NII) rose 11% to Rs 4514 crore in Q2 September 2016 over Q2 September 2015. The bank's provisions and contingencies jumped 412.28% to Rs 3622.74 crore in Q2 September 2016 over Q2 September 2015.
Axis Bank's gross non-performing assets (NPAs) stood at Rs 16378.65 crore as on 30 September 2016 as against Rs 9553.17 crore as on 30 June 2016 and Rs 4451.11 crore as on 30 September 2015. The ratio of gross NPAs to gross advances stood at 4.17% as on 30 September 2016 compared with 2.54% as on 30 June 2016 and 1.38% as on 30 September 2015. The ratio of net NPAs to net advances stood at 2.02% as on 30 September 2016 as against 1.08% as on 30 June 2016 and 0.48% as on 30 September 2015.
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Bharti Airtel rose 1.48% after earnings before interest, taxes, depreciation and amortization (EBITDA) margin was reported at 38.4% in Q2 September 2016, higher than 34.7% Q2 September 2015. The company's consolidated net profit fell 4.9% to Rs 1461 crore on 3.4% rise in total revenues to Rs 24652 crore in Q2 September 2016 over Q2 September 2015. EBITDA rose 14.5% to Rs 9466 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 25 October 2016.
In a separate announcement, Bharti Airtel announced that the board of directors of the company at a meeting held on 25 October 2016, authorised a committee of directors to evaluate options for monetization of a significant stake in Bharti Infratel, in accordance with applicable regulations. The final outcome of this exercise will be placed before the board for approval, before any final decision is taken. Bharti Airtel has also requested Bharti Infratel to allow sharing of any information with any prospective buyer, subject to customary confidentiality arrangements. There is no certainty of any transaction until such time the board reviews and approves the final proposal. The announcement was made after market hours yesterday, 25 October 2016.
Bharti Infratel, India's leading telecom tower infrastructure provider, is a significant subsidiary of Bharti Airtel. Bharti Airtel has, in the past, divested stakes in Bharti Infratel to a clutch of private equity investors led by Temasek, KKR and other high quality investors in 2008. This was followed by an initial public offering (IPO) in the year 2012 and block sales in the stock market in 2014 and 2015. As on date Airtel holds 71.96% stake in Bharti Infratel.
State Bank of India dropped 0.54%. The bank said that it has issued and allotted 25,000 AT1 Basel III compliant non-convertible, perpetual, subordinated, unsecured debt instrument in the nature of debenture, of face value Rs 10 lakh each at par through private placement bearing coupon at 8.39% per annum payable annually with call option after 5 years or any coupon payment date thereafter aggregating to Rs 2500 crore in third tranche. The announcement was made after market hours yesterday, 25 October 2016.
Reliance Industries (RIL) fell 0.56%. The company through its overseas wholly-owned subsidiaries signed facilities agreements for availing term loan facilities for an aggregate amount of $573 million (equivalent to approximately Rs 3828 crore) for part financing the construction cost of six very large ethane carriers (VLECs) (the facilities). RIL group had ordered six state-of-the-art VLECs, which will be the largest ethane vessels ever built in the world. The announcement was made after market hours yesterday, 25 October 2016.
The facilities with door to door tenor of 12 year comprise of a Korea Trade Insurance Corporation (K-sure) insured tranche of $286.50 million and a commercial tranche of $286.50 million. The facilities shall be secured by collateral of respective VLECs. The said VLECs are financed at a debt to equity ratio of 80:20. The facilities were oversubscribed by two times and saw participation from seven banks in K-sure covered tranche and six banks in the commercial tranche. This reflects the strong credit standing of RIL in the international financial markets. VLECs would transport ethane from United States of America to Dahej terminal in India, which will be used for feeding RIL's crackers at Dahej, Hazira and Nagothane, to ensure consistent supply of ethane at competitive prices.
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