Stocks Radar: DHFL, GSK Pharma, Indian Oil, PNB, Tata Steel

Indian stock markets opened in the red on Tuesday—the first trading session since the government announced a mega bank merger plan and data showed growth in the Indian economy slumped to a six-year-low in the April-June 2019 period.

At 11:20 am, the S&P BSE Sensex was trading 1.11 percent lower at 36,916.83 points while the NSE Nifty 50 fell 1.13 percent to 10,898.30 points.

The market breadth was tilted in favour of sellers. About 1,094 stocks declined and 597 shares advanced on the National Stock Exchange. Ten out of 11 sectoral gauges compiled by the National Stock Exchange traded lower, led by the NSE Nifty PSU Bank Index’s 3.2 percent fall. The NSE Nifty IT Index was the top sectoral gainer, up 0.9 percent.

Here’s a look at the stocks in news moving the markets today:

DHFL Rises As Debt Is Converted To Equity

Shares of Dewan Housing Finance Corporation Ltd. rose as much as 3.36 percent intraday to Rs 49.25 apiece, extending gains for second consecutive trading session.

This, after the DHFL board on Friday approved the conversion of whole or part of the mortgage financier’s outstanding debt into shares and securities, besides raising its authorised share capital as part of its resolution plan.

On Aug. 22, BloombergQuint reported that DHFL’s over Rs 85,000 crore in liabilities are to be split into three portions, as per the resolution plan being formulated.

GSK Pharma Rises After Land Deal With Oberoi Realty

Shares of GlaxoSmithKline Pharmaceuticals Ltd., rose as much as 2.62 percent intraday to Rs 1,247.00 apiece, after a land deal with Oberoi Realty Ltd.

GSK Pharma has sold 2.40 lakh square metres of its land in Thane to Oberoi Realty for Rs 889.50 crore, the Indian arm of the British drugmaker said in an exchange filing on Aug. 30. The company has paid Rs 337.46 crore towards obtaining all required statutory and regulatory approvals, the filing read.

The GSK Pharma stock has declined 29 percent in the last 52 weeks, compared to the benchmark Sensex that has lost 3.2 percent, Bloomberg data shows.

PNB Slumps After Bank Merger Plan Is Announced

Shares of Punjab National Bank fell as much as 8.55 percent to Rs 59.35 apiece, in their steepest decline since July 8.

The public sector bank on Monday said its board will consider capital infusion of up to Rs 18,000 crore during its meeting on Sept. 5. This after Finance Minister Nirmala Sitharaman announced that PNB would subsume Oriental Bank of Commerce and United Bank of India, as part of mega PSU bank merger plan. The bank will also receive Rs 16,000 crore from the Rs 70,000 crore bank recapitalisation outlay.

Tata Steel Slumps As U.K. Plant Is Shut Down

Shares of Tata Steel Ltd. fell as much as 3.78 percent to Rs 331.85 apiece, on news that the company will shut one of its plants in the U.K.

Tata Steel will shut Orb Electrical Steels plant in the Welsh city of Newport, resulting in a potential loss of around 400 jobs at the facility, the steelmaker said on Sept. 2.

"Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges. We saw no prospects of returning the Orb business to profitability in the coming years," said Henrik Adam, chief executive officer of Tata Steel's European operations.

India’s steelmakers are trading at valuations lower than the previous two downcycles as the U.S.-China trade war, waning global steel demand and a stronger dollar pulled down metal prices. The Nifty Metal Index has tumbled nearly 30 percent so far in 2019, the most in four years. Fourteen of the 15 constituents of the gauge have fallen.

Indian Oil Falls After Govt Said To Weigh IOC-BPCL Merger

Shares of Indian Oil Corporation Ltd. slumped as much as 5.06 percent to Rs 116.25 apiece on reports that the government is weighing an IOCL-BPCL merger.

According to a Sept. 2 Business Standard report, the government is planning to offload its entire stake in Bharat Petroleum Corporation Ltd., and IOCL is emerging as the most likely buyer. If the IOCL-BPCL merger goes through, it will be the third large energy sector consolidation in three years—after the ONGC-HPCL deal in 2017-18 and the PFC-REC merger this year.

The IOCL stock has declined 24 percent in the last year while the Sensex has fallen 3.2 percent, Bloomberg data shows.