Indian share markets trimmed some of their early gains to trade marginally higher during the noon session. Metal stocks and software stocks witnessed majority of the buying momentum. Bank stocks traded in red.
The BSE Sensex is trading higher by 73 points and the NSE Nifty is trading higher by 23 points. Meanwhile, the BSE Mid Cap index & the BSE Small Cap index is up by 0.6% & 1% respectively. The rupee is trading at 64.52 to the US$.
In news from steel sector, JSW Steel share price is trading on an optimistic note (up 2.9%) after the company received its board’s approval to set up a Slurry Pipeline to transport iron ore from coastal Karnataka to the Vijayanagar works.
This Slurry Pipeline can be set up within 24 months at an estimated cost of Rs 21 billion. This will facilitate transporting iron ore through Slurry Pipeline at a very competitive 15% cost of alternate means of transport.
This strategic project will enable the company to source almost 50% of the current requirement of iron ore at Vijayanagar works from outside Karnataka either from imports or from Odisha / eastern sector at prices lower than the prevailing prices in Karnataka.
Meanwhile, as per an article in The Financial Express, one of the major irritants in the growth journey of Indian steel industry has been the poor record of repayment of loans taken from the banks and other financial institutions.
Out of the total loans to the industry, the steel sector has a share of 10.24% (Rs 3.1 trillion). It is reported that the stressed assets of steel sector out of the gross NPAs comprise around 29.38% of the total and stands at Rs 1.5 trillion.
Which Sectors are a Menace to Indian Banks?
The financial liabilities of SMEs are a major worry as many them are served notices for violation of environment norms and therefore need to close their operations. Under the current subdued market conditions and the continuing economic restructuring that is taking place in China, the demand for conventional standard grades of steel is on the wane and the suppliers of these grades of steel from induction furnaces and other SMEs that are environment polluting would be facing a huge problem of survival.
