Reliance Industries Ltd share prices may jump 45%, which are already up 10% in 3 days
The rally in RIL share may continue if current Petrochemical spreads sustain, this will result in Re-Rating of Oil to Chemical stake sale by RIL, which may drive the stock price up by 45% from current levels.
The polymer spreads are at decade highs, helped by strong downstream demand from industries like Auto,Durables,Consumer Goods,Packaging and Medical supplies.
RIL share price has underperformed since the beginning of the year, with Nifty up 10.8% and RIL shares up only 8%. The sustained strong growth of petrochem performance will improve the stock performance as well, with Jefferies having a Target price of Rs.2580 and an optimistic target price of Rs.3150.
Carlyle Group to acquire a controlling stake in PNB Housing Finance
Private Equity firm Carlyle Group will acquire a controlling stake of more than 50% in PNB Housing Finance for Rs. 4000 crore.
The transaction is expected to be completed by 1st Jan 2022 and the Carlyle group will have the right to nominate the chairperson of PNB Housing Finance.
The Carlyle Group will own 50.2% stake through 2 of their entities namely Pluto Investments & Quality Investment holdings.
PNB will continue to be the promoter and a key stakeholder, till 31st March 2021 it held 32.65% stake,which will reduce to 20.3%.
Aditya Puri former MD of HDFC Bank will infuse capital of 25 crores into PNB Housing Finance for a stake of 0.2% through Family investment firm Salisbury Investments.Since this news the stock was up 20%.
The Carlyle Group has invested more than $1.7 billion of equity in 8 financial services companies as of March 2021, and $3.2 billion in India overall.
Auto Sales hit in May 2021 due to lockdown
Auto sector has been hit by the second wave and lockdowns across states.
Market Leader Maruti Suzuki reported 71% decline in sales in the months of May, along with them, Mahindra & Mahindra also reported 52% drop and Hyundai sales also declined by 48%.
Sales of Tractors, Private Vehicles, Commercial Vehicles and 2 Wheelers are going to be affected by the current lockdown like restrictions.
Tractor volumes are low since some rural areas are severely affected, Personal Vehicle and 2 Wheeler sales will likely be slow, along with that Commercial Vehicle volumes will be affected due to lower freight availability which will result in postponement of new orders.
Oil extends gains on OPEC supply discipline and demand prospects
Oil prices increased with OPEC sticking to cautiously bringing back the soil supply in the market in June and July, with the expectations of robust recovery in the USA and China the world’s 2 biggest oil consumers.
Brent Crude price is at $70 currently, after solid demand from USA and China, also the vaccine rollouts will only help to further rebalance the global oil market.
The producer group will return to 7 million barrels per day in June and 8.4 million barrels per day in July.
The ongoing talks about sanctions between Iran and the USA have hit a roadblock this week and it is unclear if they will be restored before Iran’s presidential elections on June 18, which will provide room for the demand to catch up.
India’s sugar production is forecast to grow 17% to 33.7 million tonnes in the year ended September 2021. Indian sugar mills may achieve their target of exporting 6 million tonnes of the sweetener by the end of June, three months before September
The surge in exports is mainly due to firm global prices and subsidy, which have made the overseas markets lucrative.
The government is also encouraging sugar mills to divert excess sugar and sugarcane for the production of ethanol, which is blended with petrol. This is a step towards improving the liquidity position of sugar mills, which are grappling with a cash crunch.
Steel & Iron Ore Industry
China is the world’s top steel producer and biggest consumer of iron ore, the key steelmaking ingredient. A recent spike in prices for the material, partly fuelled by supply concerns, continued with a 10% limit-up surge on Monday.
China announced a series of measures on Friday to tighten controls on steel capacity, in an effort to curb pollution in key areas as well as reduce “blind investments and disorderly constructions”. The commodity exchanges on Monday moved to raise trading limits and margin requirements for some iron ore contracts and reinstated fees on steel futures as a blistering rally in the ferrous metals complex showed no signs of stopping
India’s exports grew by 80 percent to $7.04 billion during the first week of this month. Imports too rose by 80.7 percent to $8.86 billion during May 1-7, 2021 as against $4.91 billion in the same period last year
Major export commodities which are recording healthy growth include gems and jewellery, jute, carpet, handicrafts, leather, electronic goods, oil meals, cashew, engineering, petroleum products, marine products and chemicals.
The board of directors of InterGlobe Aviation Limited, which operates the country’s largest domestic airline IndiGo has approved raising up to ₹3,000 crores through a Qualified Institutions Placement (QIP) process.
QIPs are a way to issue shares to the public without going through standard regulatory compliance.
The latest decision by IndiGo’s board of directors comes at a time when airlines are struggling with a declining passenger demand due to an unabated rise in fresh covid cases across the country.
The second wave of Covid-19 is spreading beyond urban areas to rural belts, resulting in automobile registrations across the country.
Automobile registrations across the country dropped by 32 percent last month as compared to April 2019 with passenger vehicles showing a decline of over 11 percent.
Commercial vehicles witnessed a downswing of 34.58 per cent to 51,436 registrations versus 78,630 in the same period.
Two-wheeler registrations totaled 8.65 lakh last month compared to 13.38 lakh in April 2019, marking a downturn of 35.35 percent. Passenger vehicle registrations edged lower by 11.56 percent to 2.08 lakh from 2.36 lakh in the two-year-ago period.
However, tractor registrations rose by 3.52 percent to 38,285 last month compared to 36,984 in April 2019. That took overall vehicle registrations to 11.85 lakh in April 2021, down 31.83 percent from 17.38 lakh in April 2019.
1.Pradhan Mantri Awas Yojna (PMAY):- Pradhan Mantri Awas Yojana is an initiative by Government of India in which affordable housing will be provided to the urban poor with a target of building 20 million affordable houses by 31 March 2022. Some defined benefits of PMAY are given below:-
- Avail subsidy upto 2.67 Lakhs*
- Interest subsidy at a rate of 6.5%* for a tenure of upto 20yrs.
It is a very good scheme run by the Government. Here we are getting defined benefits and the GST rate on affordable houses is 1% without ITC.
Conditions to avail Subsidy:-
- It should be the first house of the buyer.
- The beneficiary family should not have availed of central assistance under any housing scheme from the Government of India.
- Aadhaar Card is Mandatory
2. Angel Broking IPO:- Angel Broking IPO listed today, i.e. October 5. They had predicted the higher price band between Rs.304-306 but on a listing day, it was open at Rs.275. There is less demand in the grey market. This is the first IPO in 2020 opened at a discounted price. The reason behind this could be low revenue, negative cash flow and high level of competition. From an investment point of view, we need to explore more options in other sectors.
3.Automobile industries:- There is a sharp growth in the two-wheeler segment in September sales. In September, the 2 wheeler segment Bajaj had recorded a 10% rise in sales, TVS rose by 4% in sales, Royal Enfield rose by 1%. As far as lockdown is concerned and limited availability of public transport, we can see good growth in this sector.
4.TCS Buyback:- TCS is going for the buyback of share on 7 Oct 2020 during the pandemic period. TCS is sitting on a high Cash reserve of Rs. 73, 993 cr in March 2020. This Buyback indicates the interest of promoter, confidence in business and future expansion plans.
5.JSW Paints:- According to industries, the paint market business is estimated to cross Rs.50,000 cr in value and expected to grow by 15 % YoY. In the current Market scenario, JSW had entered into the paint business competing with Asian paints – Berger paints with an investment of Rs. 600cr ( 250 cr Equity and 350 cr debt). The competition is big in this segment, however, the consumption is there in the Market.
6.GST Collection:- Gross GST revenue collected in September 2020 stood at ₹95,480 crores, the Finance Ministry said in a statement. This included collection of ₹17,741 crores under Central GST, ₹23,131 crores under State GST, and ₹47,484 crores under Integrated GST. The gross GST revenue collected in the month of June 2020 is Rs. 90,917crore. There is a growth in the GST collection from the last quarter of June 2020 which indicates the positive sign in the market and economic activity.
7.Advance tax Collection :-Total advance tax collection in the second quarter fell by 25.5 per cent to Rs 1,59,057 crore from Rs 2,12,889 crore y-o-y. Reasons behind the low collection of Advance Tax are slow down in business in quarter 1 and 2 and low earnings by industries. In the next quarter, we can expect to see the rise in advance tax collection as the economy slowly is opening and industries are working at maximum capacity.