Mumbai : Indian stocks fell the most in a week, led by construction companies, on concern the government will raise less than expected from share sales to fund infrastructure and after it postponed the sale of mobile phone licences.
Jaiprakash Associates Ltd., a builder of dams and roads, slumped to the lowest in three months after investors offered the government lower prices than forecast for equity in NTPC Ltd., a power producer. The delay of an auction of third-generation mobile phone licenses that would help fund the government's deficit contributed to the drop. Bharti Airtel Ltd. sank 1.6 per cent.
"Investors are concerned about how the government will address the fiscal deficit on a sustainable basis," said Mohit Mirchandani at Taurus Mutual Fund in Mumbai. "That concern has increased after the 3G auction delay."
The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 271.10, or 1.6 per cent, to 16,224.95, the steepest decline since January 27. The S&P CNX Nifty Index on the National Stock Exchange lost 1.8 per cent to 4,845.35. The BSE 200 Index also retreated 1.8 per cent to 2,055.29.
Jaiprakash slipped 4.5 per cent to Rs131.2 (Dh10.43), its lowest close since November 3. DLF Ltd., India's biggest developer, slid 4.4 per cent to Rs321.35.
Investors offered to buy only 80 per cent of the 412 million NTPC shares that went on sale on Wednesday, according to data on the National Stock Exchange web site as of 4pm (Indian time) yesterday. Offers ranged from the Rs201 minimum per share to a maximum of Rs210.
Below expectation
The NTPC share sale's "overall collection will be 10 to 15 per cent lower than what was expected," said Ambareesh Baliga, vice- president of equities at Karvy Stock Broking Ltd. in Mumbai. "The earlier expectation was that the offer would happen at a higher level."
NTPC, India's biggest power generator, declined 1 per cent to Rs207.7. The government aimed to raise more than $2 billion (Dh7.35 billion) from the sale of 5 per cent of NTPC's shares.
