The Mint Report for 11 January 2011

The Mint Report for 11 January 2011

Shares of Patni Computer Systems went up by over 3% on the Bombay Stock Exchange and 6% on the National Stock Exchange after the company’s board approved a stake sale to US-based IT firm iGate. According to the deal, iGate will pick up a 63% stake in Patni at 503 per share. The total value of the deal, including an open offer of 20% that will follow later, will be about $1.22 billion.

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The combined entity will have an estimated revenue of over $1 billion and employ 25,000 people. The Supreme Court took cognizance of a public interest litigation to cancel 2G licences that were issued in 2008. It accordingly served notices to the Department of Telecommunications, the Telecom regulations authority and 11 telecom companies. They will have to respond to the court before 1 February, which is when the court will next hear the matter. Among the telecom companies served notice are Etisalat, Idea Cellular, Tata Teleservices, Aircel, and Vodafone. The court took up the matter based on a letter dated 18 November 2010 from Trai to the DoT secretary, which asked the government to cancel the licences of companies who had failed to comply with their obligations. The PIL was filed by lawyer Prashant Bhushan on behalf of the Centre for Public Interest Litigation and others.

The Prime Minister’s Office (PMO) has asked the oil ministry to decide on giving consent to Vedanta Resources Plc’s $9.6 billion acquisition of Cairn India Ltd by January-end. This is almost one month ahead of the deadline the ministry had set for itself. The directive followed a one-on-one meeting between Vedanta’s chairman, Anil Agarwal and Prime Minister Manmohan Singh last week.

The BSE Senses tumbled 2.4% to its close at its lowest in six-weeks. The fall was led by financials on rate increase jitters and fund inflow slow down fears. The benchmark index fell for the fifth straight session, its longest such losing streak since May 2010. The 30-share BSE index shed almost two and a half percent to close at 19,224 points, its lowest close since 26 Nov., 2010 and Nifty lost 141 points to close at 5762. 28 of its components closed in the red. Rate-sensitive sectors were the hardest hit, with the banking, auto, and real estate indexes declining between 2.1% and 3.6%. The main index is down 6.3% already in 2011, after rising 17.4% in 2010, on the back of record foreign fund inflows of $29.3 billion.