Daily Market Analysis

Daily Market Analysis – 26th Feb 2021

1. Petrol Diesel Price Rise-

India is the World’s Third- largest oil market and depends heavily on crude oil. India consumes nearly 211.6 million tonnes of oil every year.  India does not have enough reserves. India depends on imports with some of the blame on the Organisation of petroleum exporting countries, and they have cut supplies but the demand is rising.  Owing to this, prices have gone up. People in India are paying more than 100 rupees a litre for petrol and this rise in fuel prices is affecting every Indian Household. 

2. Government’s Taxes- 

It’s important to understand fuel pricing in India and the global price is currently 60 dollars per barrel somewhere around 28 rupees per litre. 

Indians are paying 100 rupees because of taxes.  India has the highest tax on fuel 260% on the base price of petrol & 256% for diesel, according to CARE rating. 

 3. Govt committed to bring natural gas under GST regime: PM Modi-

India is committed to bringing natural gas into the Goods and Services Tax (GST) regime to make prices cheaper and uniform across the country. PM Narendra Modi said the government was spending ₹7.5 lakh crore over 5 years to build oil and gas infrastructure. India will generate 40% of all its energy from renewable sources by 2030. 

Natural gas is currently outside the ambit of GST, and existing legacy taxes – central excise duty, state VAT, central sales tax — continue to be applicable on the fuel. Non-inclusion of natural gas under the GST regime is having an adverse impact on its prices due to the stranding of taxes in the hands of gas producers/suppliers and is also impacting natural gas-based industries due to the stranding of legacy taxes paid on it,” the Federation of Indian Petroleum Industry.

4. Industries affected by high oil prices- 

• Airlines 
• Transportation
• Consumer Discretionary
• Automobiles

 5. OPEC+ is due to meet on 4th March 2021 

The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, is due to meet on 4th March 2021, group will discuss a modest easing of oil supply curbs from April given a recovery in prices.

Daily Market Analysis – 25th Feb 2021

Govt will monetize or modernize public sector: PM Modi

Prime Minister Narendra Modi said India will “monetize or modernize” state-owned assets and that the government’s focus should be on public welfare schemes and development, rather than engaging in business. 

“The government will go forward with the mantra of monetizing or modernize,” “PSEs (public sector enterprises) should not be run because they were started many years ago or they were someone’s pet project.”

A lot more smart money will come in and will help in the growth of India. The private sectors will be able to bring the best global practices and good manpower and will also create more jobs in India. The money that the government will generate can be then utilized for the development of infrastructure as well as public welfare schemes.

Centre lifts embargo on Private Banks for Govt biz

The Centre on Wednesday announced that it has lifted the embargo on private sector banks for the conduct of government-related banking transactions, such as taxes and other revenue payment facilities, pension payments, and small savings schemes. 

“This step is expected to further enhance customer convenience, spur competition and higher efficiency in the standards of customer services. Private sector banks will now be equal partners in the development of the Indian economy and in furthering the social sector initiatives of the government,” the Centre said.

As a result of this news, the share price of HDFC was up by 5%, Axis by 4.6%, and ICICI by 4.4%. It can be said as a good move on the government’s part to make the private sector participate in the government’s business. As mentioned by PM Modi, the private sector will be playing a big role in the growth of India in the future.

Blackstone-backed Sona Comstar files DRHP for Rs. 6,000 crore IPO; biggest ever in auto component segment

American private equity giant Blackstone-promoted auto parts firm Sona Comstar has filed a draft red herring prospectus with the Securities and Exchange Board of India (Sebi) to launch an initial public offer (IPO) and raise around Rs 6,000 Crore in 2021.

Investment banks Kotak Mahindra Capital, JM Financial, Credit Suisse, Nomura, and JP Morgan are working on the IPO. The legal advisors are Cyril Amarchand Mangaldas & Trilegal.

The IPO proceeds will be utilized primarily to repay existing debt and the rest will create debt funding capacity for additional future CapEx investments. Blackstone will continue to be a long-term investor in the firm post listing.

Govt may consider Oriental Insurance or United India for privatization

Finance Minister Nirmala Sitharaman in her Budget 2021-22 had announced a big-ticket privatization agenda including privatization of two public sector banks and one general insurance company.

The government may consider privatizing Oriental Insurance or the United India Insurance Co as their financial health has improved after a series of capital infusions, people aware of the development said.

To further strengthen their financial health, the government is expected to infuse Rs 3,000 crore in the public sector general insurance companies during the current quarter.

Both Oriental Insurance and the Chennai-based United India Insurance may be able to generate interest from the private sector because of their improved financials

Daily Market Analysis – 23rd Feb 2021

1.Rise in bond yields caused by short selling by traders

As the recent rise in bond yields both in the domestic and the US markets has caused a frenzy in the stocks markets, short selling by market players may be a major reason for the rise in yields.

The strategy of short selling involves the sale of a security which the seller has not yet purchased but borrows from others in the market.

The report noted that the banks and the primary dealers resort to short selling when their view is bearish, that is, the prices of the bond will fall and the yield will rise.

They make money if the bond prices drop and yields rise, and over a point of time, this could become a self-fulfilling prophecy as such short sellers keep on rolling over their borrowed security from the repo market till the time they believe that yields will continue to rise.

According to the SBI report, the only way to break such self-fulfilling expectations is for the Reserve Bank of India (RBI) to conduct large scale open market operations (OMO) to provide necessary steam to the bond market to rally and with an increase in price, many short sold position will trigger stop losses and market players will scramble to cover open positions.

2.Commodity Updates

Commodity prices traded higher on Tuesday continuing the buying trend from the previous session. Bullion prices made a strong comeback after the previous week’s decline while base metals prices continued upside with China’s demand. The dollar index ended down by 0.39 percent for the day.

Bullion prices traded higher with spot gold price at COMEX was trading near $1,812 per ounce while spot silver price at COMEX was trading up at $28.12 per ounce in the morning trade. Bullion prices witnessed recovery on weaker dollar and pandemic worries.

Crude oil traded higher with benchmark NYMEX WTI crude oil prices were trading 1.50 per cent up at $62.60 per barrel in the morning trade. Crude oil prices rose to 13 month high on expectations of slower restart of oil output form cold weather impacted Texas area. The resume of refinery operations will bring oil demand back on track.

Base metals complex continued to soar with Copper and Nickel prices traded with more than 1 percent gains. Copper prices traded to the highest levels since 2011 at LME while Nickel prices rallied to the most since 2014 as China resumes trading on Monday. The US stimulus hopes, demand from China, and weaker dollar combined have boosted base metals to trade higher.

MCX Gold April’s future witnessed a good recovery as the price breached the initial resistance of Rs 46,640 (5 Day EMA). Meanwhile, the price is still hovering in the downward sloping channel with immediate resistance near Rs 47,280, followed by Rs 7,560 (21 Day EMA). On the other hand, key support holds around Rs 46,640, followed by Rs 46,200. On the momentum front, RSI has reversed from the oversold zone and now it is moving towards the mid-zone of 50(42) indicating a rebound in the price. 

MCX Silver March future has extended its rebound as price breached the initial resistance of Rs 69,680 (5 Day EMA). Meanwhile, the price is trading above the bullish crossover of 5 and 21 days EMA which has strengthened the recovery in Silver prices. On the upside Rs 70,760 holds key resistance, the price needs to sustain above to extend its rally towards the next resistance of Rs 71,800, followed by Rs 72,700.

3.RBI & Bonds

The supply of bonds is huge, and simple economics will tell us that when supply exceeds demand, prices fall. In the case of bonds, yields go up as they move inversely to prices. Simply put, the bigger the bond supply, the higher the yields will climb. The RBI is hoping to bend this logic a bit by participating as a buyer. So far in FY21, the central bank has bought Rs3 trillion worth of bonds, either through auctions or secondary market purchases. Indirectly, it has absorbed a quarter of the government’s borrowing program of Rs 12.8 trillion.

But unlike in the past, the borrowing itself is huge this year and the next year as well. Ergo, it is futile for the RBI to stand in as a big bond buyer for long especially when it has begun normalization of liquidity. Other indirect signals on yields through auction cutoffs and operations twists are effective but only for a short while.

The odds of bond yields rising from here on are piling up. India’s banks are readying to lend more to the private sector and credit growth is expected to pick up. They will have less incentive to keep buying government bonds. The retail inflation outlook looks unfriendly with sticky core inflation and rising fuel prices. Bond traders cannot ignore this. Moreover, globally bond yields are rising and Indian papers cannot be an outlier.

Then there is a supply of bonds from state governments. States have already borrowed close to Rs 6 trillion from the market and may end up borrowing another Rs 1.59 trillion. There are simply not enough willing investors to match the deluge of bonds this year.

Daily Market Analysis – 19th Feb 2021

RailTel IPO grey market premium plunges

RailTel Corporation of India’s Rs 820 crore initial public offer (IPO), which has been seeing strong retail participation at bids totaling 11 times the issue size so far, closes for subscription on Thursday. Till the end of Day 2 of the IPO, the issue was subscribed 6.55 times with the retail quota getting bids for 10.55 times the limit. The qualified institutional buyers’ quota was subscribed 2.97 times and the non-institutional investor category 2.63 times the limit. The portion reserved for employees was subscribed 1.85 times. The grey market premium still suggests a 13-15 percent upside over the upper limit of the IPO price band.

SIPs back in limelight even as MF outflow continues

With the equity market scaling record highs, new SIP account registration has risen to a record of 16.4 lakh in January 2021, the data from the Association of the mutual fund of India (AMFI) show. This is the second month in a row when SIP registrations hit a record level. The previous peak was in January 2018 at 12.9 lakh accounts. The two-month rolling average of new SIP registration reached 30.7 lakh accounts compared with an average of 18 lakh in the past four and half years.

What’s in Joe Biden’s sweeping immigration bill being rolled out in Congress?

An eight-year path to citizenship would be provided for millions of people who were living in the United States unlawfully on Jan 1, 2021. They would receive a permanent residency card, commonly referred to as a “green card,” after five years if they pass certain requirements including background checks and could then apply for citizenship after three years. President Joe Biden’s proposed legislative overhaul of the U.S. immigration system, due to be formally introduced in Congress on Thursday, would be the largest in decades, but it faces steep odds.

Vodafone Idea lost 2.7 million users in October

Vodafone Idea Ltd slipped further behind its main rivals in terms of subscriber base as it net lost 2.7 million mobile subscribers in October. Data from the Telecom Regulatory Authority of India showed. In contrast, its rivals Reliance Jio Infocomm Ltd and Bharti Airtel Ltd saw an increase in their subscriber base by 2.2 million and 3.7 million respectively, which helped them further consolidate their position as the largest and second-largest operators in the country. Reliance Jio had 406 million subscribers as of October end, while Bharti Airtel had 330 million. Vodafone Idea, which was once the largest operator in India, slipped further behind its rivals at 293 million.

Should depositors worry about co-operative banks?

It is a financial entity engaged in the business of collecting deposits and lending – like any other commercial bank. But they function on the principle of cooperation and sharing profits with members. They offer services essentially to members who are shareholders of the bank. A co-operative bank also offers many high-tech products and services like any commercial bank. But their business jurisdiction in most cases is localized.

Petrol prices all time high

Petrol and Diesel prices have been on the rise once again. The price of a litre of Petrol breached the Rs.100 mark yesterday in Rajasthan. Elsewhere in the country, it’s the same story, albeit not as drastic and it’s upsetting a lot of people. Including the Prime Minister, who recently lamented about India’s dependency on foreign oil. India is most certainly dependent on foreign oil. Back in 2015, the government had outlined plans to reduce India’s import dependency  –  from 77% in 2013–2014 to 67% by 2022. Because the central government saw an opportunity to make some money here. After all, tax collections were abysmal. They were already borrowing too much. And they were desperately looking to fund their expenditure through any means necessary. So the central government increased excise by a record ₹10 per litre on petrol and ₹13 per litre on diesel, planning to raise a ₹1.6 lakh crores. States meanwhile got in on the act as well. They bumped up taxes in tandem and together these extra charges alone make up 55–60% of the final retail price today.

Daily Market Analysis – 18th Feb 2021

Cabinet approves PLI scheme for telecom sector worth ₹12,195 crore

The Union Cabinet on Wednesday approved a ₹12,195-crore Production Linked Incentive (PLI) scheme for domestic manufacturing of telecom and networking products such as switches, routers, radio access networks, wireless equipment, and another internet of things (IoT) access devices.

The core component of this scheme is to offset the huge import of telecom equipment worth more than Rs 50,000 crore and reinforce it with ‘Made in India’ products, both for domestic markets and exports,” the telecom ministry said in a release. Currently, India imports over 80 percent of its telecom and wireless networking equipment.

With the inclusion of telecom equipment manufacturing under the ambit of PLI schemes, the total number of sectors under such programs stands at 13. All the sectors included under the various PLI schemes are mostly labor-intensive and aim to attract global manufacturing giants into the Indian manufacturing space.

Trade experts are of the opinion that all the sectors chosen under PLI schemes are also a part of the government’s plan to present India as an alternative destination to China for setting up manufacturing hubs.

In November, the PLI scheme was expanded to include 12 more sectors such as automobile and automobile components, pharmaceutical drugs, textile products, food products, high efficiency solar photovoltaic modules, white goods such as air conditioners and LED bulbs, and specialty steel products. Finance Minister Nirmala Sitharaman had in her Budget for 2021-22 said the total outlay on PLI schemes in these 13 sectors over the next five years would be Rs 1.97 lakh crore.

Warren Buffett Buys Telecom, Drugmaker Stocks; Apple Stake Cut

In Q4, Buffett opened new stakes in Verizon (VZ), Chevron (CVX), Marsh & McLennan (MMC) and EW Scripps (SSP).

The new Verizon stake is big: – Buffett paid $8.62 billion for the 147 million shares. It now accounts for 3% of the portfolio, making it the No. 6 stock by number of shares held.

Berkshire dumped entirely Pfizer (PFE), JPMorgan Chase (JPM), Barrick Gold (GOLD), M&T Bank (MTB) and PNC Financial (PNC). The conglomerate grew stakes by 117% in T-Mobile (TMUS), 34% in Kroger (KR), 28% in Merck (MRK), 20% in AbbVie (ABBV), 11% in Bristol-Myers Squibb (BMY), and 1% in RH (RH).

Buffett cut a stake in Apple (AAPL) by 6%. It remains the No. 1 stock in his portfolio by market value and No. 2 stock by a number of shares held, at 10.6% of the portfolio. He kept an Amazon (AMZN) stake steady.

Daily Market Analysis – 16th Feb 2021

1. Vi 5G Rollout, Fund Raising

Vodafone Idea Ltd (Vi) on Monday said it is prepared for the rollout of 5G wireless service and plans to fold up its 3G services by FY22 as it bids to move towards becoming a 4G-focussed telco in a bid to boost revenue, although it would keep its 2G services running for years given that it has a large segment of basic phone subscribers. 

The cash-strapped telco had announced its fundraising plans in September 2020. It’s in active discussions with potential investors for proposed fundraising of up to ₹25,000 crores in debt and equity. a consortium led by US-based Oaktree Capital, including a few other private equity firms such as Varde Partners, has proposed investing up to $2.5 billion in Vi through hybrid debt papers. 

The consortium is said to have offered $2-2.5 billion of capital to the Birla group company that faces tens of billions of rupees in government dues.

2. Four Government Banks Shortlisted for privatisation 

The government has shortlisted four mid-sized state-run banks for privatisation, under a new push to sell state assets and shore up government revenues.

The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India. Two of those banks will be selected for sale in the 2021/2022 financial year which begins in April.

The government is considering mid-sized to small banks for its first round of privatisation to test the waters. In the coming years, it could also look at some of the country’s bigger banks. However, the government will continue to hold a majority stake in India’s largest lender State Bank of India, which is seen as a ‘strategic bank’ for implementing initiatives such as expanding rural credit. 

3. Amazon sought $40 million to let Future-Reliance deal proceed

American e-commerce giant Amazon sought $40 million from Future Retail in exchange for the Future Group and Reliance Industries going ahead with the “disputed transaction”. 

In August 2020, over two phone calls … Abhijeet Mazumdar on behalf of the claimant… asked for $40 million as compensation in exchange for the Future Group and Reliance proceeding with the disputed transaction,” a document submitted by the Future Group to the arbitrator in late 2020 said.

Amazon, which owns a 49 percent stake in Future Coupons, an unlisted company, has challenged the Future Group-Reliance Retail deal, claiming it did not consent to such a transaction.  It said the deal breached some existing agreements

Daily Market Analysis – 15th Feb 2021

1. Rise in Petrol and Diesel Prices

The petrol price in Mumbai was Rs. 95 per Litre on Saturday and it has increased by 30 Paisa. Diesel price also increased by 36 paise from the Saturday rates. There is a price difference between Petrol and diesel prices from state to state due to tax and duties.

Central And state tax makes up 61% of retail selling price and 56% of diesel prices. The international market price per barrel is 61 USD.

The demand for Crude oil is rising Due to the unlocking of the economy globally, increase in demand, and global supply. As we see rising demand for crude oil, we can see the shift to renewable energy. It will also impact the demand on the automobile industries as well.

There is a fair chance of increasing the price of crude oil.

2. Franklin India Debt Mutual Fund

Franklin India had declared to shut 6 funds with AUM of Rs.25k cr on 23 April 2020 due to liquidity and redemption Pressure. Franklin AMC had received near 13k from the maturity of bonds till January 2021. This will help to pay back to its investor and still some bonds are in the process of maturity.

The schemes — Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund, and Franklin India Income Opportunities Fund.

3. Govt is planning to infuse Rs. 3000cr into PSU general Health Insurance companies

The targeted health insurance companies are Nation Health Insurance, United Health Insurance, and oriental Health Insurance. The purpose of providing this fund is to improve their financial and solvency position, meet the insurance needs of the economy, absorb changes and enhance the capacity to raise resources and improve risk management. 

The cabinet had also decided to increase the authorized share capital of National Insurance Company Ltd. to Rs 7,500 crore and that of United India Insurance Company Ltd. and Oriental Insurance Company Ltd. to Rs 5,000 crore each to give effect to the capital infusion decision.

This Decisions will be taken on March 8 in parliament, after that execution will start.

These steps will help to create confidence among the investor towards PSU sector and help to improve overall health Industries.

4. RailTel IPO

RailTel Corporation a “Mini Ratna (Category-I)” PSU is one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fiber network on exclusive Right of Way (ROW) along Railway track.

Facts about the company 

RailTel is providing good opportunities for investment and it has high potential to grow as infra grows. 

Daily Market Analysis – 12th Feb 2021

1. The government is planning to spend Rs 700 crore on setting up 2,500 farmer producer organizations (FPOs) in 2021-22.

This will help the government reach out to 60,000 farmers and provide them with a better farming ecosystem. A group of small and marginal farmers as FPOs will have better bargaining power and financial strength to cultivate high-value crops said, officials. This is part of the government’s endeavor to create 10,000 FPOs with a provision of Rs 6,865 crore in five years.

FPOs will play a key role in the successful implementation of the new farm laws which, the government claims, will enhance the income of farmers. Whether it’s selling produce directly to traders and companies or contract farming, FPOs will play a critical role in bringing a large number of farmers and huge chunks of land together.

2. The International Finance Corporation picks up 10% of the first green bond

IFC has picked up 10 percent of the first green bond issuance worth $561 million by Continuum Wind Energy as the anchor investor. The IFC has subscribed to 10 percent or $56 million of Continuum Energy’s first green bond sale closed earlier this month, the World Bank Group member said.

On February 2, was the first to report that Continuum was in the market to raise $560 million via a six-year green bond issue. Finally, it closed the issue raising $561 million at a price of 4.5 percent over the US treasury.

The bond, which had an order book of $3.2 billion, was rated BB+ by Fitch and Ba2 by Moody’s and was listed on the Singapore Exchange on February 10. The dollar-bond offering was heavily oversubscribed almost seven times and the proceeds will primarily be used to refinance existing debt.

Continuum is one of the largest providers of renewable power to corporates in the commercial and industrial sectors, with roughly 2 GW of wind and solar projects across the country.

3. Sun Pharma settles with SEBI

Sun Pharma, officials including Dilip Shanghvi settle the case of alleged market norms violation with SEBI. According to separate settlement orders, Sun Pharmaceutical paid over Rs 56.11 lakh towards settlement charges and Shanghvi paid Rs 62.35 lakh.

4. Airlines permitted to fly only 80% of pre-COVID flights till March-end.

The cap on the number of domestic flights that Indian airlines are permitted to operate will remain at 80 percent of their pre-COVID levels till March 31 or till the summer schedule begins, said the Civil Aviation Ministry on Thursday. The ministry had set the 80 percent limit on December 3, 2020, without specifying till what date it would remain in place.

The summer schedule begins at the end of March for all the airlines. Aviation regulator Directorate General of Civil Aviation (DGCA) approves both the schedules – summer and winter – of all the airlines.

India and Russia have concluded an air-bubble arrangement and it will come into effect from Friday, the Russian Embassy said.

Under the pact between the two countries, special international passenger flights can be operated by their airlines into each other’s territories under restrictive conditions.

5. Signs of life in the US dollar threaten India’s post-Budget stocks rally

The foundation of the ongoing bull run in domestic and global equities rests on three assumptions: continuation of ultra-loose monetary policies, vaccine-induced economic recovery and the impending bear market in the US dollar. Of these three assumptions, the last one is about to be tested severely in the coming weeks.

The US dollar is expected to witness a sharp recovery in the coming weeks and that will test several global investors’ call of a multi-year bear market in the reserve recovery in the coming weeks and that will test several global investors’ call of a multi-year bear market in the reserve currency of the world. The near doubling of Nifty50 since April and the multi-year highs hit by the MSCI Emerging Market Index have been attributed to the severe weakness seen in the US Dollar Index over the past 10 months.

6. SEBI fines OPG Securities, its directors in co-location case

The Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 5.20 crore on OPG Securities and its directors in the co-location case. The OPG Securities directors who have been penalized include Sanjay Gupta, Sangeeta Gupta, and Om Prakash Gupta.

Sebi alleged that OPG used NSE’s system to its advantage by having an arrangement with an NSE staff that helped it to connect first. The first one to connect to the lowest load server would get an advantage in terms of receiving data faster than others.

Sebi had asked the NSE board to initiate a forensic investigation of all the concerns raised by it, for which the NSE board appointed Deloitte. The regulator had instructed OPG Securities to give access to computers, terminals, and electronic records to Deloitte. It also directed OPG not to delete or make modifications to any of the records, emails, communications, and IT logs.

7. NSE to buy 26% stake in Indian Gas Exchange

The National Stock Exchange (NSE) is likely to pick up a 26 percent stake in the newly launched Indian Gas Exchange (IGX). After Adani Total Gas, Torrent Gas, and Gail (India) acquired a 5 percent stake each in the Indian Gas Exchange (IGX), an arm of the Indian Energy Exchange (IEX), National Stock Exchange (NSE) is likely to acquire at least 26 percent stake in IGX.

According to a source aware of the development, the NSE board has already given clearance to this proposal and has approached markets regulator SEBI in this regard. In the Adani Total Gas, Torrent Gas, and Gail deals, the value of the transactions was not available for the public.

The source added that the deal has also got a go-ahead from the Petroleum and Natural Gas Regulatory Board (PNGRB) and is in an advanced stage.

Daily Market Analysis – 11th Feb 2021

IRDAI annual report: LIC’s claim settlement ratio deteriorated in FY20 to 96.6%

LIC saw its claim settlement ratio deteriorate marginally in FY20 to 96.6% from 97.7% in FY19 even as private insurers increased their settlement ratio to 97.18% from 96.6% in this period. Private sector life insurer Max Life had the highest claim settlement ratio for the industry at 99.2% followed by HDFC Life and TATA AIA – with a settlement ratio above 99%. Edelweiss Tokio Life and Sahara Life had among the worst settlement ratios at 83.4% and 89.4% respectively. Private insurer, ICICI Prudential was in the tenth spot with a settlement ratio of 97.8%.

Government plans to sell 20% of its stake in National Fertilizers Ltd through ‘offer for sale’

The GoI intends to disinvest 20 percent paid-up equity capital of NFL out of its shareholding of 74.71%, through the ‘Offer for Sale’ (OFS) method of shares by promoters through the stock exchanges. The Centre is also considering allotting shares to eligible and willing employees of NFL at a discount on the issue or discovered price. Incorporated on August 23, 1974, National Fertilizers is a Mini Ratna company with an authorized capital of ₹1,000 crores and a paid-up capital of ₹490.58 crores out of which the Government of India (GoI) holds 74.71 percent shares and 25.29 percent shares are held by financial institutions and others.

Geotagging of warehouses in works for location tracking

The government is working on geotagging all warehouses, cold storages and refrigerated vans in the country for real-time tracking of the location and status of space availability. The data will be captured in a mobile app, which can be used by the government as well as farmers to locate the nearest warehouses and store their produce, reducing the risk of wastage. As per an estimate, we lose Rs 44,000 crore every year due to harvest rot. Even if there are storage facilities available in the vicinity, farmers don’t know about them. With the mobile app, they will have access to information.

Spat between builders, cement makers ramp up over price hike

The tussle between manufacturers of construction inputs such as cement and steel and builders is intensifying, with both sides trading charges of faulty trade practices. The South India Cement Manufacturers Association (SICMA) alleged that builders were spreading “misinformation” on cement prices to take advantage of the economic recovery and increase real estate prices, which are already at unaffordable levels.

CCI actions on Cement & Steel Industry

The Competition Commission of India had come down heavily on cement companies, many of whom saw their offices being raided in December 2020. In 2016, the CCI had slapped a fine of Rs 6,700 crore on 11 cement makers, including UltraTech, Ramco, ACC and Lafarge. Offices of some of these companies were raised in December 2020, as part of a fresh probe against price cartelization. Steel companies have maintained that domestic prices, despite the hikes, remained lower than international rates. Prices in China, Europe, and the US – the three biggest markets – were higher than those in India.

Five-fold spike in BoI’s Q3 net at Rs 541 cr as NPA provisions dip

Public sector lender Bank of India’s (BOI) net profit rose by 412 percent to Rs 541 crore in the third quarter ended December 2020 (Q3FY21) on a sharp dip in provisions for bad loans. It had posted a net profit of Rs 106 crore in the third quarter ended December 2019 (Q3FY20). The bank’s deposits grew by 0.72 percent to Rs 6,11,879 crore in December 2020 from Rs 5,22,138 crore a year ago. The lender’s Capital Adequacy Ratio stood at 12.51 percent with tier-I of 9.44 percent in December 2020. The bank raised Rs 750 crore Basel-III-compliant AT-1 bonds in January 2021.

Mastercard to allow cardholders to transact in cryptocurrencies

Mastercard has partnered with some of the biggest cryptocurrency firms including Wirex and Bitpay. The company will begin allowing cardholders to transact in certain cryptocurrencies on its network, becoming the latest to embrace digital assets. Mastercard isn’t recommending to start using cryptocurrencies. It is enabling customers, merchants and businesses to move digital value.

Delhivery plans to raise $800 million through IPO

In 2019, Delhivery raised $415 million in a Series F financing round led by SoftBank, which valued the Gurugram-based company at $1.5 billion. It is looking to raise up to $800 million through an initial public offering (IPO) that might value the company at $3.2-4 billion.

Daily Market Analysis – 10th Feb 2021

Reliance Jio, Bharti Airtel & Vodafone Idea apply to bid in spectrum auctions:

• Telecom Market leaders Reliance Jio, Bharti Airtel and Vodafone Idea have filed applications for participation in the upcoming 4G spectrum auctions which are due to start on March 1, 2021. The auction for over 2300 MHz of airwaves, valued at Rs 3.92 lakh crore at base price, though is likely to see limited bidding intensity for spectrum worth less than Rs 48,000 crore, with Jio and Airtel expected to be the main players.
• The Department of Telecommunications (DoT) is not auctioning the expensive 5G airwaves in this tranche, bulking up the existing 4G spectrum will allow Telcos to launch 5G services immediately in those bands, without waiting for the sale of airwaves in the 3300-3600 MHz bands earmarked for the next-generation technology. It is estimated that the two telcos would spend 15-20% on additional 4G airwaves, and this investment will go in select bands in the metro and category A circles, where 4G spectrum assets can now be deployed for future 5G use quickly. The upcoming spectrum auction could help Jio and Bharti fortify their 5G positioning by acquiring good magnitude of 1800 and 2300 MHz (bands that could be used for 5G), while Vodafone Idea seems to hold a meager chance to hold a position to bid for 5G bands given its weak balance sheet.

Retail investors continue to exit from equity Mutual Funds:

• Retail investors have continued to book profits in equity mutual funds, at every rise in the shares. Investor’s selling spree in the equity market has continued for the seventh consecutive month with the overall tally reaching the value of Rs. 42,256 crores. Even the debt mutual funds have witnessed a high amount of outflows, especially liquid funds. The majority profit booking has been witnessed among large-cap funds, followed by smallcap and midcap funds. This has been a good opportunity for the investors to exit from the funds not performing well.
• The skepticism regarding the corrections in some time, investors are preferring to continue to stay invested through systematic investment route (SIP), to strike a balance between utilizing the growth opportunities, and realization of high profits. Investors have been continuously investing into the equity markets through systematic investment routes especially into midcap funds, thematic funds, index funds, international funds, and balanced advantage funds to take advantage of diversification opportunities. In such markets, it is a better strategy to stay invested in the staggered manner to cash-in on the opportunities in the equity markets as well as maintaining risk mitigation measures.

Government committee recommends banning all cryptocurrencies, except those issued by state:

• With the recent saga over the cryptocurrency, further propelled by Tesla’s big bet on Bitcoin, the Indian investors having exposure in the cryptocurrencies traded overseas are in a fuss, due to the government’s stance on banning such cryptocurrencies, which has led to these investors rushing to seek legal aid over these investment’s fate in the county. The finance minister, Nirmala Sitharaman constituted a high-level Inter-Ministerial Committee (IMC) under the Chairmanship of Secretary (Economic Affairs) that has suggested that all the private cryptocurrencies, except any virtual currencies issued by the state, will be prohibited in India.
• The central government will take a decision on the recommendation of IMC and legislative proposal if any would be introduced in the Parliament following the due process. In 2018, the RBI had banned banks from processing transactions relating to cryptocurrency. While, in March 2020, the Supreme Court had overturned the ban.
• The government is exploring the use of blockchain technology proactively for ushering in the digital economy, and a cryptocurrency bill is being finalized and which is expected to be sent to the cabinet soon. The cryptocurrency bill is the pressing need of the hour since the existing regulatory bodies in the country like RBI and SEBI too do not have a legal framework to directly regulate cryptocurrencies as they are neither currencies nor assets or securities or commodities issued by an identifiable user.

LIC Policyholders will have a quota in the IPO:

• The initial public offering of Life Insurance Corporation (LIC) would be launched in the next financial year. The LIC Amendment Act has been made part of the Finance Bill, thereby bringing the required legislative amendment for launching IPO of the country’s largest life insurer.
• In the Finance Bill 2021-22, it has been proposed to have a reservation on a competitive basis, to an extent of up to 10 percent of the issue size, in favour of the life insurance policyholders of LIC, while the government will remain the majority shareholder and will continue to retain management control safeguarding the interest of policyholders. This could provide a good opportunity to the existing LIC policyholders, but the guidelines for allotment are yet to be laid out in public.

IndiGo pays Rs 2.1 crore to settle case with SEBI:

• The co-founder of InterGlobe Aviation, Rakesh Gangwal, alleged several violations of corporate governance norms, RPT norms, disclosure norms, and misrepresentation in the IPO document in October 2015 at the company. Based on its investigation, SEBI issued a show-cause in November 2020 to InterGlobe, seeking an explanation for several violations, while in December 2020, InterGlobe filed a settlement application with Sebi to settle the matter, without admitting or denying the findings of fact. Interglobe Aviation has settled a pending dispute with SEBI by agreeing to settle charges of Rs 2.1 crore, through a consent order.