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Most Indian Stocks Rise; Mahindra & Mahindra Gains on Takeover

Aug. 23 (Bloomberg) -- Most Indian stocks climbed, led by Mahindra & Mahindra Ltd. after it signed an initial agreement to acquire Ssangyong Motor Co. in South Korea.

Mahindra & Mahindra, India’s largest sport-utility vehicle maker, advanced 1 percent after Pawan Goenka, president of Mumbai-based Mahindra’s automotive and farm-equipment division, said in Seoul the company plans to develop new cars with Ssangyong. Jindal Steel & Power Ltd., the second-biggest steelmaker by market value, gained after it resumed work on its steel and iron ore project in Bolivia’s El Mutun mines.

“Indian companies are cash-rich now, we may see more such deals going ahead,” said Arun Kejriwal, the Mumbai-based director of Kejriwal Research & Investment Services Pvt. “We are seeing only stock-specific action. The broad index is not going to move much.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, was little changed at 18,409.35. Three shares climbed for every two that fell on the 30-member gauge. The S&P CNX Nifty Index on the National Stock Exchange rose 0.2 percent to 5,543.50. The BSE 200 Index increased 0.4 percent to 2,366.10.

Mahindra rose 1 percent to 624.15 rupees. A stake in Ssangyong, which is operating under bankruptcy protection, may help Mahindra become a leading maker of SUVs, Goenka said.

Jindal Steel increased 3 percent to 709.75 rupees. Bolivia’s government gave an additional 3,000 acres of land for the project, the company said on Aug. 20.

IL&FS Transportation Networks Ltd., a toll operator, soared 6.4 percent to 325.95 rupees after it was rated “buy” in new coverage at Goldman Sachs by analysts led by Pulkit Patni.

BRIC Valuations

Foreign fund inflows to India’s equities have climbed 69 percent this year, making the Sensex the most expensive in Asia and the BRIC markets, which include China, Brazil and Russia. The Sensex, which is extending last year’s biggest rally in 18 years, is trading at 17.6 times estimated profit.

Overseas funds bought a net 26.6 billion rupees ($569.3 million) of Indian equities on Aug. 18 and 19, raising total investments in the stocks this year to 576.6 billion rupees, according to the nation’s market regulator.

Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.

The following were among the most active on the exchange:

State-owned refiners: India’s state refiners got 140 billion rupees as part of the compensation for selling fuels at below cost in the year ended March, Oil Secretary S. Sundareshan said in New Delhi today. Indian Oil Corp. (IOCL IN), the country’s biggest state-run refiner, gained 3 percent to 404.35 rupees. Bharat Petroleum Corp. (BPCL IN), the second-biggest, soared 11 percent to 776.05 rupees. Hindustan Petroleum Corp. (HPCL IN) rose 5.4 percent to 537.8 rupees.

Developers: Builders in India’s financial capital of Mumbai will get a tax exemption for redevelopment under the Slum Rehabilitation Scheme, the Economic Times newspaper reported on Aug. 21, citing a notification from the tax department. Housing Development & Infrastructure Ltd. (HDIL IN) rose 1.1 percent to 296.9 rupees. Ackruti City Ltd. (AKCL IN) increased 1.5 percent to 536 rupees.

Coffee producers: Arabica-coffee futures advanced to their highest in more than 12 years in New York and robusta also rallied in London as storms headed toward producing countries and as speculators increased bets on higher prices. CCL Products India Ltd. (CCLP IN) jumped 9.9 percent to 232.95 rupees. Tata Coffee Ltd. (TCO IN) gained 7.7 percent to 525.35 rupees.

ITI Ltd. (ITI IN) jumped 5.2 percent to 43.8 rupees. India plans to invite new bids to sell a controlling stake in ITI, a state-owned telephone equipment maker, the Economic Times reported on Aug. 21, citing a government official it didn’t identify. ITI’s Chairman S.K. Chatterjee couldn’t immediately be reached at his office telephone for comment on the report.

Tata Steel Ltd. (TATA IN) increased 0.5 percent to 521.55 rupees. India’s biggest producer of the alloy will invest 10 billion rupees to set up a ferrochrome and a rebar steel unit at its planned industrial park in the eastern state of Orissa, according to an e-mailed statement.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Linus Chua at lchua@bloomberg.net

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