The Mint Report for 9th August 2010

The Mint Report for 9th August 2010

New Delhi: After poor response to recent stake sales, the government has decided new shareholding norms shouldn’t apply to PSUs. It has exempted government-run firms from the rule that says at least 25% of all public companies should be publicly listed. Under rules put in place in June, companies that had floated less than 25% to ramp up public holding by at least 5% every year. And while the government has not provided any reasons for the exemption, recent stake sales of NTPC and NMDC haven’t fared well, failing to attract foreign investors. Both those stake sales were eventually rescued by government-run financial companies.

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Newly compiled figures from auto industry body Siam show car sales hit record levels in July. Sales accelerated 38% to 158,764 units. But that’s not expected to last. Analysts point out that India’s two biggest carmakers, Maruti and Hyundai cannot ramp up production to meet higher demand. The other problem is components. Over the last few months, vendors haven’t been able to supply them in adequate numbers forcing both Maruti and Mahindra and Mahindra to cut down on production.

Reliance Capital has reported a decline. Net profit fell 49% to Rs78 crore in the first quarter. In a statement the firm indicated it would change its strategy to focus on profitability rather than growth. Its shares plummeted 1.71% on the BSE to finish at 768.45.

Markets rose on Monday, with the Sensex reaching its highest in two and half years. The index rose 144 to 18,287. And the Nifty went up 47, finishing 5,486.