Economy Watch

Economy News

Indian Economy & Policy Watch as on 29 Jun 2009

HIGHLIGHTS

Govt. mulls hike in natural gas prices by 17%

Govt. likely to hike petrol price by Rs 2 a liter; diesel by Re 1

India, China to support developing nations` growth: WB

Govt. to set up national fund for unorganized sector

Commonwealth projects dominate Delhi budget

Overseas borrowings by India Inc up 65% in May`09

World Bank foresees 8% GDP growth for India for 2010

Projects worth Rs 5,500 bn to be commissioned in FY10: CMIE

US Fed keeps key interest rates steady

Govt to borrow more than planned in interim budget: CMIE

Govt. committed to higher education reforms: Kapil Sibal

First qtr review of monetary policy 2009-10 on July 28

India fairs better than others to meet eco crisis: Preneet Kaur

Budget `09 will have a big focus on infrastructure: Goldman

Budget must set up agenda for relief for export sector: COO, D&B India

Inflation

India`s benchmark wholesale price index (WPI), inflation continues to be in the negative zone for the second consecutive week to stand at -1.14% for the week ended June 13 as against -1.61% a week ago.

Last week, Inflation slipped into negative for the first time since 1977-78.

Rs v/s US $

On Jun. 22, 2009 (Monday), The partially convertible rupee settled weaker to stand at 48.60/61 against the US dollar than its previous close of 48.08/09.

On Jun. 23, 2009 (Tuesday), The partially convertible rupee settled marginally stronger to stand at 48.56/57 against the US dollar than its previous close of 48.60/61.

On Jun. 24, 2009 (Wednesday), The partially convertible rupee settled flat at 48.55/56 against the US dollar than its previous close of 48.56/57.

On Jun. 25, 2009 (Thursday), The partially convertible rupee ended 5 paisa weaker to stand at 48.60/61 against the US dollar than its previous close of 48.55/56.

Economy & its sectors

Govt. mulls hike in natural gas prices by 17%

Government is likely to raise the prices of natural gas produced by ONGC and Oil India by over 17% and index it to inflation rate to help the two firms cut losses on selling fuel below cost.

The Petroleum Ministry has prepared a draft Cabinet note for raising prices of natural gas produced by ONGC from fields given to it on nomination basis to Rs 3,765 per thousand cubic meters (or USD 1.98 per million British thermal unit) from current Rs 3,200 per thousand cubic meter (USD 1.68 per mmBtu).

For OIL, the gas price has been proposed at Rs 4,205 per thousand cubic meters, a senior ministry official said.

ONGC currently loses about Rs 30 billion in revenues annually on selling gas from fields like Bassein and Mumbai High at Government capped price.

``The Cabinet note is ready and will be circulated once Petroleum Minister Murli Deora approves it. In all likelihood, the proposal may go to Cabinet sometime next month``, he said.

The price would change by Rs 55 per thousand cubic meters for every 10 points change in Wholesale Price Index (WPI).

Price of gas produced by ONGC and OIL from fields given to them on nomination basis, called the Administered or APM rate, were last revised in June 2005.

APM price would be raised to USD 4.20 per mmBtu in stages over the next three years; the official said adding this would bring rates at par the sale price of gas produced by Reliance Industries from its giant KG-D6 fields.

Govt. likely to hike petrol price by Rs 2 a liter; diesel by Re 1

Government is likely to hike petrol prices by Rs 2 a liter and diesel by Re one a liter unless excise duty on the two fuels are cut to neutralize the impact of firming international oil rates.

State fuel retailers Indian Oil (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) currently lose Rs 1.35 billion a day on sale of petrol, diesel, LPG and kerosene and their annual revenue loss for current fiscal is estimated to be at Rs 387 billion.

The basket of crude oil India imports has averaged USD 70.49 per barrel in the second fortnight of June against the May average of USD 58, sending alarm bells ringing, a Petroleum Ministry official said.

``We have to act to save our PSU``, he said. ``The burden of rising global oil prices has to be shared equally between the companies, the government and consumers``.

PSUs lose Rs 2.96 a liter on diesel and Rs 6.08 per liter on petrol. ``One-third of this or Rs 2 a liter on petrol and Re 1 on diesel can be passed on to consumers`` he said.

The rest of the losses would be covered by issue of government bonds to the retailers and subsidy sharing by upstream firms like ONGC.

``If the Finance Minister Pranab Mukherjee cuts excise duty on the two fuels, consumers can be spared from price hike``, he said.

Petrol attracts an excise duty of Rs 11.35 a liter and diesel Rs 1.60 a liter. Besides Rs 2 a liter road cess is levied on the two fuels.

The official said the proposal to hike petrol and diesel rates would have to go to the Cabinet for approval.

Petroleum Minister Murli Deora refused to answer questions on price hike, but the issue of deregulation of petrol and diesel prices was still under consideration of the government.

The government has been mulling decontrolling petrol and diesel prices for couple of months now but may be fast losing the window as the move would now result in steep rise in fuel prices.

India, China to support developing nations` growth: WB

Boosted by the strength of India and China, developing nations would grow 1.2% this year, but without the two, these economies would shrink 1.6%, said World Bank.

Warning that the world is entering an era of `slower growth`, World Bank has projected the global economy to shrink 2.9% this year.

The World Bank in its latest report titled `Global Development Finance 2009: Charting a Global Recovery` has said that excluding India and China, the developing economies would shrink 1.6% this year.

``Developing countries are expected to grow by only 1.2% this year, after 8.1% growth in 2007 and 5.9% growth in 2008. When China and India are excluded, GDP in the remaining developing countries is projected to fall by 1.6%, causing continued job losses and throwing more people into poverty``, the report said.

The Bank anticipates the global economy to contract 2.9% this year but to grow in 2010. Earlier, the bank projected the world GDP to shrink 1.7%. Global growth is also expected to be negative, with an expected 2.9% contraction of global GDP in 2009, he report noted.

Govt. to set up national fund for unorganized sector

The ministry of micro, small and medium enterprises on June 22 recommended setting up of national fund for the unorganized sector to provide credit support exclusively to the small business units.

The ministry suggested that initially, the fund could be set up under Small Industries Development Bank of India (SIDBI) and later on a separate institution need to be set up for this purpose.

It is learnt that the minister of state for micro, small and medium enterprises, Dinsha Patel on June 22 met the prime minister Manmohan Singh to discuss various disadvantages faced by the small and medium business units like lack of access to finance and unfavorable markets.

To ensure increased access to credit by micro enterprises, the minister also suggested earmarking of a specific percentage of net bank credit for small enterprises under the priority sector lending targets.

Commonwealth projects dominate Delhi budget

Commonwealth Games projects get focused attention in Delhi Budget.

There is a steep hike in the funds allocation in games related projects with concentration mainly on transport.

An amount of Rs 21.05 billion has been earmarked for these projects.

Presenting the budget in the state assembly, the Delhi finance minister, A K Walia also proposed to decrease the luxury tax from 12.5% to 10% keeping in view the Commonwealth Games.

This will make hotel accommodation cheaper. However, no fresh taxes proposals are Budget except for tobacco products.

Value Added Tax (VAT) for tobacco products has been increased from the present 12.5% to 20% making cigarettes and other such products costlier.

The highest allocation in the budget is for transport sector which has been allocated Rs 30.69 billion followed by urban development with Rs 15.24 billion.

Overseas borrowings by India Inc up 65% in May`09

Overseas borrowings by India Incorporations increased by 65% to USD 494 million in the month of May 2009 as against previous month.

The total overseas loans raised by 35 companies through external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCB) moved up from USD 298 million in April to USD 494 million in May.

Of the total overseas borrowings, USD 326 million were raised through automatic route and USD 167 million was mopped up through approval route.

The ECB data for May showed that most of the companies raised overseas funds for import of capital goods, modernization and overseas acquisition among other things.

Bhushan Steel raised USD 20 million for rupee expenditure, while Bajaj Hindustan raised the similar amount for foreign currency convertible bonds buyback.

Suzlon Energy raised over USD 61 million under the approval route for buy back of its FCCB, while Bharat Petroleum Corporation raised USD 25 million in the month.

World Bank foresees 8% GDP growth for India for 2010

The World Bank has projected 8% growth rate for India in 2010, making it the fastest growing economy in the world surpassing even China which is estimated to grow at 7.7%.

The Bank, however, forecast India`s economy to grow by 5.1% this fiscal, the lowest in six years.

The World Bank in its report on `Global Development Finance` said the economies of developing countries are expected to grow by just 1.2% this year.

The Bank projects that the world economy can slow down to 2.9% this year.

The report said Foreign Direct Investment (FDI) inflow into India has doubled reflecting the economic progress and opening up of additional sectors of economy.

The Bank has urged rich countries to step up flow of credit to developing nations to help up speed up economic recovery.

Projects worth Rs 5,500 bn to be commissioned in FY10: CMIE

Economic think-tank, Centre for Monitoring Indian Economy (CMIE) said that various projects entailing an investment of Rs 5500 billion will be commissioned in the current fiscal in India and 40% of these will come from the public sector.

``Fiscal 2009-10 is scheduled to see projects worth Rs 5500 billion of investments getting commissioned``, said Mahesh Vyas, managing director and chief executive officer (MD& CEO), CMIE.

In the previous fiscal, Rs 2700 billion worth of projects were commissioned. It was Rs 1900 billion in 2007- 08, he said.

Among the projects to be commissioned in the current fiscal, majority would be in the power sector, Vyas said.

Union Power Minister Sushil Kumar Shinde on Tuesday said that the government is eyeing add 5,653 MW generation capacity in its 100-day programme, of which 2,300 MW is already in place.

CMIE, in its monthly review of the Indian economy for June, had said that many projects to be completed in 2009-10 are likely to get commissioned towards the end of the year.

US Fed keeps key interest rates steady

The US Federal Reserve on June 24 decided to keep key interest rate unchanged at a record low between zero to 0.25% to support the world`s largest economy which has been in a recession since December 2007.

It is learnt that `the pace of economic contraction is slowing`. But it also noted that `economic activity is likely to remain weak for a time. `

The central bank said that the condition of financial market has become better in recent month.

In the meantime, `household spending has shown further signs of stabilizing but remains constrained by ongoing jobs losses, lower housing wealth, and tight credit`.

Even though the recession is easing, the Fed believes that the economy will keep a lid on inflation.

The Fed decided to hold the key interest rate, or federal funds rate, which commercial banks charge each other for overnight loans, unchanged.

The decision means that commercial prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will stay around 3.25%, the lowest rate in decades.

Moreover, the Fed said that the interest rate is likely to remain at the current low level for `an extended period.`

The Fed also decided to stay the course on existing programs intended to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets.

As announced in March, the Fed will purchase a total of up to USD 1.25 trillion of agency mortgage-backed securities and up to USD 200 billion of agency debt by the end of the year. Now, nearly USD 456 billion worth of those securities have been purchased.

In addition, the Fed will buy up to USD 300 billion of Treasury securities by autumn, as part of its plan to bring down interest rates it cannot directly control, according to the statement. So far, the Fed has bought about USD 177.5 billion Treasury bonds.

Govt to borrow more than planned in interim budget: CMIE

The Centre for Monitoring Indian Economy (CMIE) has said that Government borrowing in the first half of the current fiscal is expected to be higher than Rs 2,410 billion projected in the interim budget.

Higher borrowing meant widening of fiscal deficit, which is already high this year because of the stimulus packages announced by the Government to prop up growth in the face of global recession.

Higher expenditure than planned but lower revenue receipts than expected in the interim budget were the reasons cited by CMIE for increased Government`s borrowings.

``In April 2009 itself, Central Government expenditure rose by 43% to Rs 662.17 billion, while tax receipts were down by 17% to Rs 198.69 billion. Lower than expected tax receipts may prompt the Government to borrow more from the market,`` CMIE said.

Excise collections in April also were down by 52.6%, or Rs 46.70 billion, which according to CMIE, could be because of the excise reliefs given in the stimulus packages of the Central Government.

Additional borrowings for the year that is borrowing over and above the estimates announced in the interim budget may turn out to be about Rs 300-350 billion, CMIE said, adding that, at present, total borrowings planned for the year amount to Rs 3,617.82 billion.

Total Government borrowing, including that of states, during the first two months of the current fiscal year amounted to Rs 1,896.91 billion, about 82% higher than the year-ago period.

The independent research agency said the Government expenditure and poor growth in revenue receipts would increase the gross fiscal deficit (GFD) during the year beyond the budgeted 5.5%. GFD was at 6.1% in 2008-09.

In the interim budget for 2009-10 presented before the April-May Lok Sabha elections, GFD was estimated at Rs 3,328.35 billion.

Govt. committed to higher education reforms: Kapil Sibal

Kapil Sibal, union minister for human resource development said that the government is committed towards improving education system in country.

Sibal underlined that a single day cannot be wasted towards enabling the right for children to be educated. This education must be inclusive and with quality he added.

The minister emphasized the three principles of `access, equity and excellence` which will not be compromised while implementing the educational reform agenda.

The ministry of human resource development would like to place on record deep appreciation for the document which is a road map for the education for the future in the country, he stated.

First qtr review of monetary policy 2009-10 on July 28

Reserve Bank of India (RBI) will release the First Quarter Review of Monetary Policy 2009-10 on Tuesday, July 28, 2009.

RBI governor D. Subbarao will be releasing the monetary policy review.

The review will be released at a meeting of the chief executives of major scheduled commercial banks at 11 a.m. on that day at the RBI`s Mumbai office.

India fairs better than others to meet eco crisis: Preneet Kaur

Minister of state for external affairs Preneet Kaur said that though India has been impacted by the global economic crisis, it has fared much better than other countries of the world.

India has made aggressive use of fiscal and monetary policy, with particular focus on fiscal stimulus in infrastructure investment, she said on response to crises.

``Our primary challenge is to get rid of chronic poverty, ignorance and disease, which still afflict millions and millions of our citizens. For this, we need a high rate of growth coupled with measures to make it inclusive``, she said.

``We have endeavored to achieve this through huge investments in the rural and farm sector, a massive rural employment guarantee scheme, infrastructure development projects, major national food security and rural health missions, and an urban renewal mission``, Kaur said.

India has actively engaged in the G-20 framework aimed at redressing the current global economic situation so as to bring the global economy back to the trajectory of sustained growth, she said.

Budget `09 will have a big focus on infrastructure: Goldman

Goldman Sachs, a leading global research agency expects the forthcoming Union Budget 2009 which is scheduled for July 6 to focus on infrastructure in a huge manner.

``We expect the budget to also emphasize low-cost housing, rural spending, and support for the exportable sectors``, Goldman said.

Given the spending pressures, it expects the central government`s fiscal deficit to remain high at 6.5% of gross domestic product (GDP) and the consolidated deficit at 10.1% of GDP in FY10 despite a fall in oil and fertilizer subsidies, it said.

The deficit, it thinks, will likely be financed comfortably due to disinvestment and the auctioning of 3G license proceeds.

``We continue to expect the INR to strengthen over a 12-month horizon, and think that concerns over financing the fiscal deficit are overdone. Our 12- month target for USD/INR is 44.7``, it added.

Goldman expects the budget to be positive for IT, capital goods, logistics, and financials.

Budget must set up agenda for relief for export sector: COO, D&B India

Kaushal Sampat, chief operating officer (COO), Dun & Bradstreet (D&B) India has outlined his expectations from the forthcoming Budget scheduled for July 6.

There are four broad areas that the budget must definitely articulate upon, he said.

First, given the losses that the export sector has suffered, the Budget must set up an agenda for relief for that sector, an agenda that goes above and beyond immediate sops, he said.

Second, the economy will continue to need a substantial push even as it is expected to start reviving in the second half of the current financial year, he added.

Third, the budget must signal the approach towards the management of the large fiscal deficit, he added further.

Last, and perhaps the most critical from a long term perspective, is that budget must set up a direction on reforms. Infrastructure ought to be a major focus area of the budget, not just towards increasing the competitiveness the export sector, but also because it will give a much needed impetus to the flagging economy while also filling the large gap in infrastructure in the country, he stated.

Given that the fiscal deficit is already at a high level, it would be challenging for the government to apportion more funds in this direction. Therefore, the budget must gear towards evolving a constructive and stable policy environment aimed towards attracting private participation in infrastructure projects. Given the high fiscal deficit, and the pressure on government revenues, it seems improbable that any major tax cuts will be announced.

However, broader initiatives that are more development oriented and bring about reforms in the larger economy can certainly be tackled, he said.

External sector

Forex reserves up by USD 8 mn

Forex reserves rose by USD 8 million to touch USD 263,652 million as on June 19, 2009, mainly due to rise in foreign currency and assets collections on a weekly basis.

As per the weekly statistical supplement of the Reserve Bank of India (RBI) released on June 26, 2009, foreign currency assets rose by USD 10 million to stand at USD 252,808 million.

During the same period, the reserve position in the International Monetary Fund (IMF) decreased by USD 2 million to stand at USD 1,239 million. The gold reserves also remained flat at USD 9,604 million.

Foreign currency assets expressed in USD include the effect of appreciation or depreciation on non-US currencies (such as Euro, Sterling and Yen) held in reserves.

Money & Banking

Call rates up by 6 bps during week ended June 26

Overnight call rates increased by 6 basis points throughout the week ended June 26 amid volatility.

Call rates traded within the range of 1-3.40% with weighted average rate (WAR) at 3.27% on June 26 as against the previous week`s (June 19) range of 1-3.30% and WAR closing of 3.21%.

At the beginning of the week on Monday, June 22, overnight call rates rose marginally within the range of 1- 3.30% with weighted average rate (WAR) at 3.21%.

Thereafter, on Tuesday, June 23 call rates remained steady within the range of 1-3.30% with WAR at 3.24%.

In the mid-week, on Wednesday, June 24 call rates increased marginally within the range of 1-3.30% with WAR at 3.26%. Thereafter, on Thursday, June 25 rates decreased marginally within the range of 1-3.30% with WAR at 3.25%.

At the end of the week, on Friday, June 26 call rates decreased within the range of 1-3.40% with WAR at 3.27%.

Rupee depreciates 0.04% vs USD during the week

The Indian rupee depreciated marginally 0.04% against the US dollar for the week ended Friday, June 26 to stand at 48.10 after fluctuating throughout the week as against previous week`s close on Friday, June 19 at 47.08.

At the beginning of the week, on Monday, June 22, Indian rupee depreciated to its one month low against the US dollar because of persistent capital outflows on the back of weak equity markets coupled with a stronger US currency in overseas markets. The partially convertible rupee settled weaker to stand at 48.60/61 against the US dollar than its previous close of 48.08/09.

Thereafter, on Tuesday, June 23, rupee recovered from one month low on the back of recovery in local equities and weaker US unit as against other major currencies overseas. The partially convertible rupee settled marginally stronger to stand at 48.56/57 against the US dollar than its previous close of 48.60/61.

In the mid-week on Wednesday, June 24 rupee ended steady as banks covered short dollar positions and importers bought dollars. But weaker US unit as against other major currencies overseas that is Euro, sterling and dollar sales by exporters supported the market sentiment. The partially convertible rupee settled flat at 48.55/56 against the US dollar than its previous close of 48.56/57.

Thereafter, on Thursday, June 18 rupee depreciated on account of month end dollar demand from the importers and the stronger US unit as against other major currencies also supported the market sentiment amid bearish local equities. The partially convertible rupee ended 5 paisa weaker to stand at 48.60/61 against the US dollar than its previous close of 48.55/56.

Finally, at the last day of the week, on Friday, June 19 rupee appreciated on the back of foreign investment inflows as gains in local equities and dollar sales by exporters also supported the market sentiment. But month end dollar demand from the importers limited the rise. The partially convertible rupee ended stronger to stand at 48.10/11 against the US dollar than its previous close of 48.60/61.

10-yr G-sec yield rises by 6 bps for week ended June 26

Indian federal gilt yields increased by 6 basis points for the week ended Friday, June 26 to stand at 6.99% as against 6.93% on Friday, June 19 a week ago.

At the beginning of the week, on Monday, June 22 Indian federal bonds yields ended almost unchanged with concerns about the lack of clarity on the government`s borrowing plans and worries about when the central bank could start tightening policy offset by ample cash. The yield on the most traded 6.07% 2014 bond closed at 6.65%, up one point from Friday`s closing of 6.64%. There were no trades in the benchmark 10-year bond on the day.

After that, on Tuesday, June 23 yields increased as renewed worries about the global economic outlook that pushed down U.S. treasury yields were countered by concerns about the government`s borrowing needs. Yield increased to 7.01% from 6.93% on Friday. There were only 46 trades in the bond on the central bank`s platform today. There were no trades in the benchmark 10-year bond on Monday.

In the mid-week, on Wednesday, June 24 bond yields decreased slightly tracking government bond yields. It decreased by two basis points to 6.99% from 7.01% on Tuesday. There were 36 trades in the bond on the central bank`s platform.

Thereafter, on Thursday, June 25 yields ended steady on the back of excess liquidity in the banking system generating demand even as inflation data showed signs of emerging prices pressures. It increased by 1 basis point to 7% from 6.99% on Wednesday. There were 35 trades in the bond.

Finally, at the last day of the week, on Friday, June 26, bond yields ended steady on the back of excess liquidity in the banking system. The yield on the 6.05% bond maturing in February 2019 decreased by 1 basis point to 6.99% from 7% on Thursday. There were 25 trades in the bond on the central bank`s platform.

Stock Markets

Sensex jumps 242.75 pts in the week

The 30 share index, Sensex climbed 242.75 points, or 1.67%, to 14,764.64 in the week ended Jun. 26, 2009. On the other hand, the broad based NSE Nifty rose 61.9 points, or 1.43%, to 4,375.50 in the same period.

Intense selling in frontliners with a more than 4% fall in Reliance Industries stock dragged shares down on Monday. The other major laggards were Tata Power, Hindalco, Grasim and NTPC. The Sensex plunged 195 points, to close at 14,326 after trading between 14,269 and 14,668 in a volatile session, whereas NSE Nifty dipped by 78 points, to 4,235.

The Sensex on Tuesday ended on a flat note with negative bias and Wednesday closed the volatile session on a higher note ahead of June F&O expiry.

Thursday being the June F&O expiry day, the sensitive index, Sensex settled the day on a lower note. It opened with a gain of 53.42 points, at 14,476.15 following positive global cues. It traded in the positive terrain most part of the day amid volatility on the back of buying interest seen in frontliners, touching a high of 14,578.46. Later in the noon trades, the index however erased all its gains and turned negative on fears a delay in important monsoon rains could hurt an already slowing economy. The annual monsoon rains are expected to be below normal for the first time in four years, the government said. Finally, it ended in negative touching a low of 14,261.14.

Sustained buying spree and hopes of onset of monsoon back home lifted the market sentiment up in the later part of the day on Friday. Even opening of positive European market supported the sentiment. The major drivers were banking, capital goods, IT and consumer durables stocks, while healthcare declined. It opened positive with a gain of 27.95 points, at 14,373.57 on Friday. It traded in the positive terrain throughout the day touching a high of 14,781.94 in the noon trades.

Sun Pharmaceuticals plunged over 12% after generic drugs made by its unit Caraco Pharmaceutical Laboratories were seized by U.S. authorities, who cited violations of manufacturing standards.

Mid-cap stocks jumped 212.17 points, or 4.28%, to 5,170.90 in the week. While small-cap shares climbed 182.79 points, or 3.25%, to 5,800.75 during the week.

Major gainers over the week in the sectoral indices were - Capital Goods gained 6.88%, IT 3.01%, Power rose 2.55%, Realty climbed 2.32%, and TECk went up 2.14%.

Auto dropped 1.13%, Metal fell 0.97%, HC lost 0.70% were among the major losers over the week.

Major gainers in 30-share index were Jaiprakash Associates (10.46%), Larsen & Toubro (7.69%), ACC (6.45%), Housing Development Finance Corporation (6.14%), and Grasim Industries (5.80%) over the week.

On the other hand Sun Pharmaceutical Industries (13.18%), Ranbaxy Laboratories (8.92%), Tata Steel (5.79%), Mahindra & Mahindra (5.40%), and HDFC Bank (3.79%) were the major losers in the Sensex over the week.

Corporate announcements

United Bank of India is planning to hit the capital market by December-end with an Initial Public Offering to mobilise Rs 3-4 billion, according to its chairman and managing director, S.C. Gupta.

ABG Shipyard through its fully-owned subsidiary, Eleventh Land Developers, on Tuesday made an open offer to acquire 32.12% stake in Great Offshore at Rs 375 per share, which is 9% higher than Bharati`s offer price of Rs 344 a share. Bharati`s open offer followed its acquisition of 14.89% stake in the company last month. ABG also holds 2.02% stake in Great Offshore.

Bharati acquired another 4.58% stake in the company at Rs 403 per share, which automatically raised its open offer price.

Macro economy

India`s benchmark wholesale price index (WPI), inflation continues to be in the negative zone for the second consecutive week to stand at -1.14% for the week ended June 13 as against -1.61% a week ago. Last week, Inflation slipped into negative for the first time since 1977-78.