Sataym Mayhem Continues - Jan 9, 2009

After a week opening in its early trades, market shown some sign of recovery on the back of some positive sentiments across the Asian market. As the government is scheduled to announce inflation figure today, the eyes are partially shifted from Satyam Scandal to inflation rate figures. Looking at past trend of declining inflation rate, market has hold its nervous for some positive news of cooling inflation rate further. The heavy selling seen across Realty, CG and Metal sectors as the indices down by around 19.44%, 7.28% and 6.86% respectively. The market breadth is negative as 305 stocks are trading in green while 1606 stocks are in red.

At 11.30 AM, the BSE Sensex down by 275.23 points at 9,311.64 while NSE Nifty declined by 91.15 points at 2,829.25. The BSE Mid Cap and BSE Small Cap are trading lower by 152.85 points and 158.69 points at 3,045.06 and 3,503.82 respectively.

Losers from the BSE Sensex Pack are Satyam Computers down by (48.19%) to Rs.20.7, along with DLF Ltd by (18.29%) to Rs.191.7, R-Com by (8.79%) at Rs.188.35, Reliance Infrastructure by (8.02%) at Rs.514.5, L&T by (7.68%) to Rs.716 and Sterlite Ind by (5.91%) at Rs.284.1.

Losers from the NSE Nifty Pack are Satyam Computers down by (49.94%) at Rs.20.15 along with DLF Ltd by (18.11%) at Rs.191.5, Unitech Ltd by (11.14%) at Rs.32.3, R-Com by (10.12%) at Rs.185.6 and Reliance Infrastructure by (9.24%) at Rs.507.

BSE Realty is trading lower by (19.44%) or 382.08 points at 1,583.12. The major losers are DLF trading lower by (26.56%) at Rs.172.30, along with Housing Dev by (15.52%) at Rs.93.10 and Unitech by (14.56%) at Rs.31.10, Penland Ltd by (14.08%) at Rs 20.75, Orbit Co by (13.50%) at Rs 49 and Omaxe Ltd by (12.43) at Rs 51.10.

BSE CG is trading lower by (7.28%) or 510.32 points at 6,498.45. The top losers in the index are Punj Llyod up by (20.15%) to Rs.110.35 along with Praj Industries by (10.74%) to Rs.54, Walchand Industries by (10.08%) to Rs.95, Kalpat Pow T by (9.02%) to Rs.266.20 followed by L&T by (9.02%) at Rs.705.60.

Satyam Computers Losses Rs. 10,000 crore - Jan 8, 2009

Satyam Computers, software services major on Wednesday lost as much as Rs 10,000 crore in market capitalization in a single trading session and the scrip declined to hit an all-time low level. The company had a market capitalization of Rs 12,067.98 crore on Tuesday while by the end of the trading session on Wednesday its market Cap stood at Rs 2,691.88 crore. The scrip fell by as much as 83 per cent to witness an intra day low of Rs 30.70 and finally managed to close with a fall of 77.69 per cent at Rs 39.95 on the BSE.

Satyam Computers fell drastically after the management revealed some malpractices in accounting methods.

On the other hand, on the National Stock Exchange, the scrip also dipped to a low of Rs 41.05, down 77.06 per cent from its previous close. The scrip had witnessed the intraday low of Rs 30.80, down 82.78 per cent over last closing.

Satyam stock holds a 1.56 per cent weight in Sensex. Following the same, the benchmark index also declined over 749 points or over seven per cent on the BSE. Ramalinga Raju, on Jan 7 resigned as Satyam''s chairman after admitting to financial wrong doings in the company''s balance sheet.

Satyam Scam - Jan 8, 2009

After the Enron scandal of October 2001, which had brought not only the management under scanner but also its accounting firm Arthur Andersen and the same case is now the Satyam''s chairman confessing to fraud. The spotlight turns on auditing firm PricewaterhouseCoopers that seems to have missed out huge craters in Satyam''s books. Sebi Chairman, CB Bhave said, "The management''s responsibility and the responsibility of the entity auditing these accounts are the issues that we will need to go into and see where exactly the failure has occurred".

Ved Jain, President of ICAI, said, "It''s a very serious issue. People repose so much of faith in auditors and in what they do. If we find any of them at fault, we will take very strict action".

Even as the investigators question top management of Satyam, the burden is likely to be shared by the audit firm, which has not explained how it missed the fraud, for ''several years''. Raju had said earlier, "The gap in the balance sheet has arisen purely on account of inflated profits over a period of last several years".

According to the Secretary General of FICCI, Amit Mitra, first the internal audits are carried on and after that there is an external audit, that is, a reputed firm from outside the company looks into the accounts. "That too failed", said Mitra.

Satyam Down 64% On Very Big Quantity - Jan 7, 2009

The company made the announcement during trading hours today, 7 January 2008.

Meanwhile, the BSE Sensex was down 657.84 points, or 6.38%, to 9676.48.

The scrip had an average daily volume of 44.63 lakh shares in the past one quarter.

The stock hit a low of Rs 58, also its 52-week low. It hit a high of Rs 188.70 so far during the day. The stock had a 52-week high of Rs 544 on 30 May 2008.

The stock had underperformed the market over the past one month till 6 January 2009, falling 20.19% as compared to the Sensex's 15.29% rise. It had also underperformed the market in the past one quarter, falling 39.14% as compared to the Sensex's fall of 12.42%.

India's fourth largest software exporter by sales has an equity capital of Rs 134.77 crore. Face value per share is Rs 2.

The current price of Rs 94 discounts its Q2 September 2008 annualised EPS of Rs 35.48, by a PE multiple of 2.64.

Raju while announcing his resignation confessed of reporting inflated figures in the accounts of the firm. As per the announcement, Satyam's balance sheet as on 30 September 2008 had inflated cash and bank balances of Rs 5040 crore, inflated debtors of Rs 490 crore and non-existent accrued interest of Rs 376 crore. Against this the liability was understated by Rs 1230 crore.

Raju said the Q2 September 2008 results had overstated operating revenues by Rs 588 crore, thereby overstating the operating profits and cash to that extent

The gap in the balance sheet has arisen purely on account of inflated profits over the period of last several years, Raju confessed adding that every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was the poor performance would result in a takeover, thereby exposing the gap, Raju said.

Raju said in the last 2 years a net amount of Rs 1230 crore was arranged to keep operations going. He said this was done by pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances. Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving. The last straw was the selling of most of the pledged share by the lenders on account of margin triggers, Raju said.

The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones, Raju said. Maytas's investors were convinced that this is a good divestment opportunity and a strategic fit, he said.

Raju ended the statement with an apology to Satyam's staff and shareholders and said he was prepared to face the legal consequences.

Meanwhile, the stake owned by founders of Satyam Computer Services has fallen to 3.6% from 5.1% after institutional lenders sold the stock, the company said after trading hours on Tuesday, 6 January 2009. IL&FS Trust Company had sold 24.52 million shares in Satyam Computer Services that were pledged with it as trustee on behalf of several debenture holders and lenders.

Satyam Computers during trading hours on 18 December 2008 had said its board will meet on 29 December 2008 to consider buyback of shares. The announcement was aimed at soothing investor nerves after the Satyam stock slumped 30.22% on 17 December 2008. Investors had chucked the stock following the company's announcement after market hours on 16 December 2008 of a $1.6 billion deal to acquire Maytas Properties and Maytas Infrastructure, companies run by Raju's sons B Rama Raju and Teja Raju.

Satyam scrapped a $1.6 billion acquisition of companies connected to its chairman after the plan angered investors. The company's total disregard for corporate governance and shareholders was shocking - Satyam had no plan to take the proposal to minority shareholders.

The World Bank said on 23 December 2008 Satyam had been declared ineligible for direct contracts with it for eight years 'for providing improper benefits to Bank staff and for failing to maintain documentation to support fees charged for its subcontractors'.

Satyam Computer Services' net profit rose 3.70% to Rs 597.43 crore on 6.87% increase in net sales to Rs 2700.52 crore in Q2 September 2008 over Q1 June 2008.

Satyam Computer Services is a global business and information technology services company. It delivers consulting, systems integration and outsourcing solutions to clients.

Reliance Industries Decided To Stop Gasoline Supplies - Jan 7, 2009

Reliance Industries has reportedly decided to stop gasoline supplies to Iran after fulfilling all contractual obligations. The decision will not impact its business as the quantity of supplies was not substantial.

The stake owned by founders of Satyam Computer Services has fallen to 3.6% from 5.1% after institutional lenders sold the stock. Satyam had said earlier the founders' stake might have been diluted as institutional lenders to whom they had pledged their shares exercised options to cover margin calls.

IL&FS Trust Company had sold 24.52 million shares in Satyam Computer Services that were pledged with it as trustee on behalf of several debenture holders and lenders. The shares had been sold since 23 December 2008, IL&FS said in a statement. The shares constitute 3.6% of Satyam's shares on issue as at 20 October 2008.

ONGC's overseas unit ONGC Videsh (OVL) is reportedly raising Rs 5250 crore from Citibank India to partly fund its recent $2.1 billion acquisition of UK's Imperial Energy. OVL will issue one-year commercial paper, which will carry an interest of 8.15%.

Kohlberg Kravis Roberts (KKR) is reportedly considering pulling out of Aricent after it bought it two-and-a-half years ago for $900 million. KKR is reported to had talks with Wipro, Tata Consultancy Services and Tech Mahindra for possible sale.

Basmati rice exporters like KRBL and Kohinoor Foods may see action on reports the government may scrap export duty of Rs 8,000 per tonne on basmati rice.

The board of Chettinad Cement Corp will meet on 9 January 2009 to consider calling off its proposed rights issue. The company, on 17 October 2008, had approved a proposal to offer rights shares in the ratio of one for every six held to raise up to Rs 250 crore.

Indiabulls Financial Services has released 3.65%, or 2.4 million shares, of Akruti City, which were held under pledge by the financial services firm. The shares were released between 12 December 2008 and 2 January 2009 by Indiabulls, it said in a statement to the stock exchange.

An arm of India Infrastructure Finance Co has reportedly sanctioned loans worth $270 million to two projects undertaken by Tata Power and Anil Dhirubhai Ambani Group.

Tata Power reportedly plans to sell part of its stake in group firms Tata Teleservices and Tata Teleservices (Maharashtra) to raise about Rs 2000 crore to fund ongoing projects.

Birla Corp has declared a lay off at its auto trim division in Birlapur in West Bengal from 5 January 2009, due to power shortage. The company declined to comment on the duration of the lay off. Birla Corp makes cement, trims, auto trims and vinoleum.

Andhra Bank reportedly plans to raise Rs 600 crore as Tier-II capital soon and the fund will be used for credit expansion.

India's truck sales have dropped 73.5% to 6,221 units in December 2008 over December 2007 in line with the sharp drop in cargo movement.

Indices Open Slightly Higher; Energy Shares Lead

MUMBAI: Equities opened slightly higher Tuesday on the back of positive global cues. Banks and energy shares pulled key indices higher, while cements and fertilizers led the rally in the broader market. At 10:05 am, the Bombay Stock Exchange’s Sensex was up 112 points or 0.63 per cent at 17,762.25.

The National Stock Exchange’s Nifty was up 36 points or 0.7 per cent at 5236.85.
Biggest Nifty gainers in early trade were Reliance Energy (up 2.93%), Cairn India (2.85%), HDFC Bank (2.26%), Nalco (2.14%), Suzlon Energy (2.13%), Unitech (1.96%) and Ambuja Cements (1.87%).

Glaxo (down 0.49%), Bharti Airtel (0.44%), Satyam Computer (0.13%) and Maruti Udyog (0.07%) were the losers. Later today Railway Minister Lalu Prasad Yadav will present the Railway Budget 2008-09, which will be eagerly eyed. Asian indices rose Tuesday, boosted by exporters and tracking a rally in the US overnight. The Nikkei 225 was 0.53 per cent higher, the Hang Seng added 1.29 per cent and the Straits Times climbed 0.46 per cent.
US stocks rose on Monday on signs two large bond insurers would stabilize, bringing a wave of relief to a market dogged by concerns of further bank write-downs. Dow Jones Industrial Average surged 1.53 per cent, Standard & Poor's 500 Index gained 1.38 per cent and Nasdaq Composite Index rose 1.05 per cent.

Sensex Loses Over 200 pts As Blue Chips Tumble @ 10:49 hrs

After a positive start and a subsequent fall from higher levels, the market has slipped into the red now due to heavy selling in some blue chip stocks from large as well as midcap segments.

The Sensex, which opened at 17,523.81 this morning, has tumbled to 17,146.97 now, netting a big loss of 202.10 points or 1.16%. The Nifty is down 1.02% or 52.35 points at 5058.40. Earlier, after opening at 5112.25, the Nifty had spurted to 5166.90.

HDFC Bank, the biggest loser in the index at present, is down by 4.4% at Rs 1410. ICICI Bank and Bajaj Auto have lost more than 3%. Hindalco and Tata Steel are down by 2.85% and 2.15% respectively. Mahindra & Mahindra has lost 2.15%. Bharti Airtel, DLF and State Bank of India have also declined sharply.

Tata Consultancy Services, Reliance Industries, Reliance Communications, Satyam Computer Services, Reliance Energy, Larsen & Toubro, ACC, Ambuja Cements, Cipla, NTPC, Hindustan Unilever and HDFC have also drifted down sharply from their earlier high levels.

Grasim Industries, ITC, Infosys Technologies, Maruti Suzuki, ONGC, Tata Motors and Wipro hold on in the positive territory with notable gains.

Suzlon Energy, Sterlite Industries, SAIL, Reliance Petroleum, Punjab National Bank and Unitech are down with sharp losses. HCL Technologies (2.15%), Siemens (1.25%), GAIL India (0.75%) and Idea Cellular (0.75%) continue to trade positive.

Tulsi Extrusions has made a fairly strong debut this morning. At Rs 118.70, the stock is up 39.65% over its issue price of Rs 85. Around 6.85 million shares have been traded so far at the Tulsi Extrusions counter on the National Stock Exchange.

IRB Infrastructure, another stock to make its debut today, moved up to a high of Rs 200 in early trade but slipped to Rs 168 subsequently on selling pressure. At present, the stock is down with a loss of 1.95% at 181.40. Over 7.3 million shares have been traded so far at the IRB counter on NSE this morning.