Weekly Market Research – Presented by Fintoo
Markets drop in a volatile week
Benchmark indices ended with small losses in a volatile trading week led by positive global market cues and a good start to Q1FY22 earnings season. Activity in the primary markets too remained upbeat which supported the overall sentiments. Global markets remained firm on solid earnings reports despite a rise in cases of delta variant Covid-19. A renewed optimism about the U.S. economic recovery fuelled a risk-on rally. For the week, the Nifty ended down by 0.4 pct to 15,856 levels. The Nifty Midcap 100 and Nifty Smallcap 100 indices too fell 0.96 pct and 0.38 pct respectively. Sector wise, the Nifty Bank index fell 2 pct while the Nifty Auto index fell 2.2 pct. The Nifty IT index gained 1.7 pct while the Nifty FMCG and Realty index were up 0.8 pct each. On the stock specific front, Wipro gained 3.7 pct and was the top Nifty gainer followed by Bajaj Finserv, Asian Paints and BPCL which gained about 3 pct each. On index losers side, IndusInd Bank, HDFC Bank and Tata Motors fell about 5 pct each.
On crude oil front, Brent rose week on week, as improved risk appetite provided support despite data showing an unexpected rise in U.S. oil inventories. Brent crude oil prices rebounded around 7 pct from lows, following a deal by the OPEC+, to boost supply by 400,000 barrels per day from August through December.
On the macro economic front, the Asian Development Bank has downgraded India’s economic growth forecast for the current financial year to 10 pct as inflation is seen rising marginally to 5.5 pct.
Globally, a data showed that the number of Americans seeking unemployment benefits rose last week from the lowest point of the pandemic, even as the job market appears to be rebounding on the strength of a reopened economy. Meanwhile, the European Central Bank said interest rates would stay at their current record low levels until it sees inflation “durably” reaching the bank’s new target of 2 pct. Japan kept the overall assessment of its economy unchanged for a second straight month in July, retaining the view that conditions remain severe due to the impact of the coronavirus pandemic.
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U.S Fed Meeting, Reliance Industries will be in focus
For the coming week, volatility is expected to remain high on account of derivatives contract expiry on Thursday. Stock specific movement is expected to continue as the earnings season enters the next leg. Some of the prominent earnings are ICICI Bank, ITC, IndusInd Bank, Axis Bank, Vedanta, Tata Motors, L&T, Kotak Mahindra Bank, Dr. Reddys and Maruti. Progress of monsoon will also be watched.
On the stock specific front, Reliance Industries will be in focus after its Q1FY22 net profit fell 7.2 pct YoY to Rs 122.73 bn vs street expectations of Rs 132 bn. Jio reported a net profit of Rs 36.5 bn, up 45 pct. Its average revenue per user (ARPU) during the quarter stood at Rs 138.4 per subscriber per month. Its retail arm Reliance Retail Ventures posted a 123 pct YoY growth in its net profit. The customer base as on June 30, 2021, stood at 440.6 million, a net addition of 42.3 million customers YoY. On the global front, the U.S federal Reserve will announce its interest rate decision on 28 July 2021. The focus will be on when the committee will communicate to the markets that tapering is on its way. In his latest testimony, Powell indicated that there has not been “further substantial progress” in the labour market to warrant tapering.
Author: Nisha Harchekar – M.M.S (Finance) – 16 yrs+ experience as Equity Research Analyst
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Pre Market Analysis – 23rd Jul 2021
Stock Market recovered its losses registered on Tuesday with Nifty gaining 192 points or 1.2% for the day. Gains were largely led by Infosys, ICICI Bank and Reliance Industries. The Nifty Metal index gained 3% and was the top sectoral gainer. For today’s trade, Q1FY22 results of Reliance Industries will be in focus. In addition, Zomato will list its shares on exchanges today after its initial public offering (IPO) received a robust 38.25 times subscription. The SGX Nifty is indicating a flat to positive opening of 10 points.
U.S. stocks gained for the third day in a row, as investors focus on earnings as lacklustre economic data and mixed corporate earnings prompted a pivot back to growth stocks. Tech shares led U.S. stocks higher Thursday, despite an unexpected jump in jobless claims that resurfaced some concerns about the economy and sent bond yields lower. The Dow Jones rose 25.35 points, or 0.07%, to close at 34,823.35, the S&P 500 gained 8.79 points, or 0.20%, to end the day at 4,367.48 and the Nasdaq Composite added 52.64 points, or 0.36%, to close at 14,684.60. Meanwhile, shares in Asia-Pacific were lower in Friday morning trade as investors monitor Chinese tech stocks in Hong Kong after regulatory concerns resurfaced. Oil prices slipped in Asia trade after gaining as much as 2% overnight.
Stocks in focus
Telecom companies in focus– SC to pronounce judgement on Airtel, Voda-Idea plea seeking re-computation of AGR dues today.
Biocon reports below estimates Q1FY22 results. Revenue declined led by generics, down 22% YoY, Biologics business up 10% YoY and 14% QoQ.
Wipro launched FieldX, a cloud-based end-to-end digital service lifecycle automation solution built on ServiceNow’s Now Platform.
Hero MotoCorp launched an updated version of its Maestro Edge 125 scooter model with prices starting from Rs 72,250.
Mahindra Lifespace Developers board will consider the proposal for the issuance of bonus equity shares, subject to requisite approvals.
India Energy Exchange– The company’s Q1FY22 consolidated net profit rose 49.2% to Rs 62.8 crore from Rs 42.1 crore, while revenue increased 34.1% to Rs 91 crore from Rs 67.9 crore, YoY.
Earnings Today– Reliance Industries, Ambuja Cements, JSW Steel, Federal Bank, United Spirits, Yes Bank, SBI Cards
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Disclaimer: The views shared in blogs are based on personal opinion and does not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Adviser before making any investment using the app. Making an investment using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.
Pre Market Analysis – 22nd Jul 2021
Nifty remained under pressure on Tuesday with selling from banking stocks as Bank Nifty closed with losses of 2% while Nifty ended well below 15650. Nifty currently remains positioned to hit 15100 in next few days as it has confirmed rising wedge breakdown below 15750 and same support will act as a major resistance. The FII suddenly sold nearly Rs 10000 crore in spot and futures markets in the past 2 days which may be a warning signal of a larger extended decline in the entire markets. Trends on SGX Nifty indicate a gap-up opening for the index in India with a 125 points gain.
US markets posted their second straight daily gain on Wednesday, with robust corporate earnings and renewed optimism about the U.S. economic recovery fueling a risk-on rally. The Dow Jones Industrial Average rose 286.01 points, or 0.83%, to 34,798, the S&P 500 gained 35.63 points, or 0.82%, to 4,358.69 and the Nasdaq Composite added 133.08 points, or 0.92%, to 14,631.95.
Stocks in news
Adani Ports Says FY25 renewable energy installation target 100 mw
Avenue Supermarts Says sales recovery continues with easing curbs
Bajaj Finance 1Q net income +4% y/y to Rs 10b, misses est. 13.66b
Bajaj Finance Aims to Cut Gross NPA to 1.7%-1.8% by March
Bajaj Finserv 1Q profit declines to 8.33b rupees vs. 12.15b y/y; Says risks remain high
Bajaj Hindusthan Sugar Alloted 143.8m shares at Rs 13.28 each to founder group on loan conversions
Bharti Airtel – Intel and Airtel collaborate to accelerate 5G
Cadila Health – Cadila, Bharat Biotech doing trials for Covid vaccine for kids; Cadila gets tentative U.S. FDA approval for Ibrutinib tablets
Granules India Says unit in Virginia clears U.S. FDA audit
Havells India 1Q Ebitda, net income beat est.; 1Q net income 2.34b rupees vs. 633.4m y/y, est. 1.51b
ICICI Prudential 4Q net loss Rs 1.86b vs. profit 2.88b y/y, est. profit 2.62b
IDFC Ltd. Says can exit as IDFC First Bank’s founder after 5 years
Infosys Says Infosys Public Services introduces Blockchain Network; Infosys Finacle, Santander UK launch international cash management platform
Jubilant Food 1Q net income Rs 625.5m vs. loss 726.3m y/y, beats est. 587.7m; revenue Rs 8.79b vs. 3.8b
TV18 Broadcast (TV18): 1Q net income 996.9m rupees vs. 9.4m Y/y; revenue +48% y/y 11.5b rupees
Wipro To invest $1b over three years on Cloud Tech, Acquisitions
Zee Entertainment -Zee to set up technology hub in Bengaluru; to hire over 500
The Asian Development Bank (ADB) has downgraded India’s economic growth forecast for the current financial year to 10% from 11% projected earlier this year, mainly on account of the adverse impact of the coronavirus pandemic.
Results on July 22
Hindustan Unilever, UltraTech Cement, Bajaj Auto, Bajaj Holdings, Biocon, Hindustan Zinc
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Disclaimer: The views shared in blogs are based on personal opinion and does not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Adviser before making any investment using the app. Making an investment using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.
Daily Market Analysis – 22nd June 2021 (Adani Group)
Adani Power to acquire 1,200 MW Essar Power’s Mahan project
The country’s largest power producer in the private sector, Adani Power Limited (APL), will acquire the 1,200 megawatts (MW) Essar Power’s Mahan Project located at Singrauli district of Madhya Pradesh. According to industry sources, Adani Power will shell out close to Rs 3,000 crore for the Mahan Project.
Adani Group has been on an acquisition spree for power generation assets across the country. Last month, Adani Group’s renewable energy arm Adani Green Energy acquired SB Energy’s solar and wind power portfolio from Softbank and Bharti Group.
TATA Realty & Candian Pension Plan Investment Board Talk to Form 2000 Cr property Platform
TATA & CPPIB in advance talks to set up a commercial property development platform in India with a 2000cr equity base. Through this platform will be looking for greenfield assets to beef up the portfolio and brownfield commercial properties across the country.
Also read: 8 Common Investment Mistakes You Must Avoid – Fintoo Blog
Four Share of Adani Group Companies locked in 5% Upper circuit
Shares of Adani Group companies were in focus during Monday’s session, with four of the six listed stocks being locked in the upper circuit of 5 percent, bouncing back up to 11 percent from their respective intra-day lows on the BSE.
Last week, all Adani group stocks had come under pressure after a media report suggested that the National Securities Depository (NSDL) had frozen accounts of three foreign funds that own stake in four of Adani Group companies. Adani group companies as well as the NSDL had clarified that the Demat accounts of three foreign funds-Albula Investment Fund, Cresta Fund and APMS Investment Fund holding shares in group companies “are not frozen”.
India Pesticides IPO opens tomorrow: Shares trades at 34% premium in grey market
Leading agrochemicals manufacturer India Pesticides is trading at a massive 34 percent premium in the grey market ahead of the opening of its initial public offering (IPO) which kicks off on June 23.
India Pesticides is one of the leading agrochemicals firms in India, with a manufacturing capacity of 19,500 million tonnes for technical and 6,500 million tonnes for formulation. The company earned 56.71 percent of revenue from the export market and the rest from the domestic market.
Automakers initiate production ramp-up to recoup lockdown losses
India’s passenger vehicle makers are ramping up production to recoup the output lost during the lockdowns since April, with market leader Maruti Suzuki expected to record its highest ever volume for a month in July.
Maruti Suzuki is scheduled to produce 198,000 units next month, industry insiders with knowledge of its plans said. They projected the July production volume of Hyundai Motor at 60,000 vehicles and Tata Motors at 30,000 units, taking the total expected output of the top three automakers alone to close to 300,000 units.
Disclaimer: The views shared in blogs are based on personal opinion and does not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Adviser before making any investment using the app. Making an investment using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.
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Daily Market Analysis – 21st June 2021 (Tata)
Tata Plans to enter Big in Digital World with all the product offerings
Tata Digital, part of all-rounder conglomerate TATA group, will soon start selling everything online via soon-to-be-launched ‘super app’ which includes right from groceries to electronics and also Financial Products like Insurance, Mutual funds and Loans.
The salt-to-steel conglomerate’s digital entity is touted as an ambitious omnichannel commerce platform that will go head-to-head with Amazon, Flipkart and Reliance’s Jio-Mart.
Tata Digital is scouting for strategic tie-ups with licensed banks and insurance companies to offer financial intermediation. These may include services such as credit card applications, insurance distribution, microloans and even merchant management, fintech industry sources privy of the discussions told the business daily. A ‘super app’ is like a digital megastore where a user can buy anything from groceries to fashion apparel and medicines. The model was first perfected by China’s Ant Group and has since been emulated by Amazon, Walmart-owned Flipkart and Paytm in India.
Proposal for 100% FDI in Oil PSUs might accelerate privatisation in BPCL
The commerce and industry ministry has floated a draft cabinet note seeking inter-ministerial views on a proposal to allow up to 100 percent foreign investment under automatic route in oil and gas PSUs, which have an ‘in-principle approval for disinvestment
The move, if approved by the union cabinet, would facilitate privatisation of India’s second biggest oil refiner Bharat Petroleum Corp Ltd (BPCL).
The government is privatising BPCL and is selling its entire 52.98 per cent stake in the company.
At present, only 49 percent of FDI is permitted through automatic route in petroleum refining by the public sector undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs.
Also read: Everything You Need To Know About Term Plan – Fintoo Blog
EPFO net new enrolments rise 13.73% to 12.76 lakh April
Defying the trend of job losses during the lockdown, more formal jobs were created under the Employees Provident Fund Organisation in April, which had seen local lockdowns in several states. EPFO added 1.27 million net new subscribers in the month, a growth of 13.7% compared to March at 1.12 million, which shows the payroll data of EPFO on Sunday. Net new subscribers under the scheme had declined by 0.28 million in April last year during the nationwide lockdown.
SEBI halts PNB Housing Finance’s Rs 4,000 crore deal with Carlyle group
It may be noted that the housing finance firm was planning to issue shares on a preferential basis to the Carlyle Group and its associates for an investment of Rs 4,000 crore — Rs 3,200 crore through equity shares and Rs 800 crore via issuance of warrants.
As per the proposed deal, the Carlyle-led consortium would acquire a controlling stake of over 50 percent in PNB HFC, a subsidiary of state-owned Punjab National bank. However, the high-profile deal seems to have hit a roadblock after Sebi’s order.
However, PNB HFC informed in a regulatory filing that it has filed an appeal before the Securities Appellate Tribunal (SAT) against the Sebi order.
In an earlier regulatory filing with the BSE, PNB HFC defended the deal, saying that the company had acted in compliance with the laws, including price regulations prescribed by the Sebi and the AoA. It further added that the preferential allotment route is in the best interests of the company, its shareholders, and all other stakeholders.
PNB HFC has also made it clear that the pricing is not required to be based on a valuation report from a registered value as demanded by Sebi. It argued that the final price is higher than the floor price suggested by registered valuers.
Disclaimer: The views shared in blogs are based on personal opinion and does not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Adviser before making any investment using the app. Making an investment using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.
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Daily Market Analysis – 18th June 2021 (Insurance)
Religare plans ₹2,000cr IPO for Care Health Insurance
Religare Enterprises is considering an initial public offer (IPO) of up to ₹2,000 crores for its health insurance subsidiary Care Health Insurance, where it plans to issue fresh shares, market insiders said.
Management of REL is in discussions with investment banks for the proposed listing of the shares of Care Health and the IPO may be launched around the end of this fiscal, they said. Reliance holds a 70% stake in the firm while Kedara Capital has around an 18% stake. Public Sector banks Including Union and Corporation Bank hold around 6% Stake in the company
The issue, which is expected to be around 2,000 crore is likely to be launched later this year or early next year. Care Health could become the third from the health Insurance Segment after Star Health Insurance and Medi Assist India.
Also read: Insurance and its Tax Benefits – (fintoo.in)
Plan to de-list DHFL Shares
A section of retail investors of Dewan Housing Finance Corp. Ltd (DHFL) plans to approach the Supreme Court against a move by the National Company Law Tribunal (NCLT) to allow delisting of the mortgage lender’s shares as part of its resolution plan. In their plea, investors are set to accuse NCLT and the Securities and Exchange Board of India (Sebi) of failing to adequately inform them about the impending delisting, which is part of the Piramal group’s approved resolution plan under the Insolvency and Bankruptcy Code.
The number of Retail Shareholders rose from 3,16,000 in December to 3,25,000 by March as the Investors were unaware of the Piramal Group’s accepted Proposal.
Since 14 June, the stock has stopped trading on the Exchanges which has created a Liquidity issue for the Retail group of Investors.
Sugar production up 13% so far this marketing year at 307 lakh ton
India’s sugar production rose 13 percent till June 15 in 2020-21 marketing year at 306.65 lakh tonnes on higher sugarcane production, according to trade data. Sugar marketing year runs from October to September.
“Sugar mills across the country have produced 306.65 lakh tonnes of sugar between 1st October 2020 and 15th June 2021. This is 35.54 lac tonnes higher than 271.11 lac tonnes produced at the same time last year,” Indian Sugar Mills Association (ISMA) said in a statement.
In Uttar Pradesh, sugar production stood at 110.61 lakh tonnes till June 15 of 2020-21 as against 126.30 lakh tonnes in the corresponding period of the previous year.
Sugar output in Maharashtra rose to 106.28 lakh tonnes from 61.69 lakh tonnes during the period under review.
In Karnataka, sugar production increased to 41.67 lakh tonnes from 33.80 lakh tonnes.
As per port information and market reports, ISMA said mills have contracted for 58 lakh tonnes of export .
It is also reported that another about 5-6 lakh tonnes of sugar is in pipeline to be physically exported in June 2021.
In addition to the above, the sugar industry had exported 4.49 lakh tonnes of sugar in Oct-Dec 2020 quarter against the export quota of the 2019-20 marketing year.
ISMA said that sugar demand may cross 260 lakh tonnes in the 2020-21 marketing year as against 253 lakh tonnes in the previous year.
Carlyle may sell 5.1% stake in SBI Cards for $682 million
US private equity fund CA Rover Holdings, an affiliate of Carlyle Asia Partners, is looking to sell 5.1% stake in SBI Cards and Payment Services worth $682 million (₹5,000 crore) through a block deal on Friday
The price per share band decided by the seller is around 1002-1041 which is upto 4.7% discount to Thursday’s closing Price of 1051.7 on NSE.
As of March 31 this Year, CA Rover Holdings held an 11.61% stake in SBI Cards and Payment Services. In March Carlyle had sold over 4% stake in SBI through Block Deals to reduce its stake to 11.61% from 15.86%.
The share has rallied 39% from its IPO price of 755 last year and is the 2nd Largest credit card Firm in India. Carlyle had made a gain of 8.5 times in three years span during the IPO period when it sold a 10% stake for 7000 crores.
With almost 1012% returns in 4 years, it would be the best exit by PE fund on an Indian Investment.
EPFO Withdrawals
The EPFO has made various announcements in recent times to make EPF withdrawal possible from one’s Provident Fund (PF) balance. These recent EPFO updates include a second Covid-19 advance to a non-refundable advance from the EPF account. These updates in regard to PF withdrawal can be an avenue for a fundraiser, in case, the EPF account holder comes across any kind of financial crisis.
- Second Covid advance: The EPFO has announced that an EPF account holder who has availed Covid advance in the first wave is now eligible for a second Covid advance from one’s PF account. In this EPFO relief, an EPF account holder can withdraw up to 75 percent of the EPF balance or 3-months basic wages plus Dearness Allowance (DA).
- Non-refundable advance: An EPFO member, who is not in the job for one month or more, can withdraw up to 75 percent of their PF balance. This facility has been given to the EPF account holder without closing their PF account enabling the EPFO member to continue pension benefit under EPFO pension rules.
- Covid advance after leaving a job: An EPFO member is now eligible for Covid advance from one’s EPF account even after leaving his or her job provided full and final PF withdrawal hasn’t been claimed.
- Rise in insurance benefit under EDLI scheme: The EPFO has raised the maximum insurance benefit under EDLI scheme from ₹6 lakh to ₹7 lakh. Now, if an EPF account holder dies during the services, then its nominee or legal heir (whichever applicable) will be eligible for insurance benefit up to ₹7 lakh. However, the minimum threshold has been left unchanged at ₹2.5 lakh.
- The EPFO has made it mandatory for the EPF and PF account holders to link their respective EPF account with Aadhar card. In the case of non-linking of the Aadhaar-EPF account, employers won’t be able to contribute to such EPF accounts as EPFO won’t allow employers to file ECR (Electronic Challan-cum Return) for such EPF accounts. Earlier the deadline for Aadhar EPF link was 31st May 2021, which has been now extended to 1st September 2021.
Nazara Tech to acquire majority stake in Publishme for Rs 20 crore
Nazara Technologies on Thursday said it will acquire a 69.82 percent stake in Publishme, the largest mobile game publishing agency in the Middle East and Turkey, for about Rs 20 crore – a move that will help the Indian gaming major strengthen its presence in the region. Nazara has signed a binding term sheet to acquire the majority stake in Arrakis Tanitim Organizasyon Pazarlama San Tic Ltd Sti (Publishme) by way of primary and secondary transaction through its subsidiary.
Nazara’s offerings are already present in India and across emerging and developed global markets such as Africa and North America.”With this acquisition, we will further expand our international footprint in the freemium segment. Nazara will aim to build local execution capabilities cutting across key growth segments – freemium, gamified learning and esports,”
He added that the acquisition will help the company in establishing itself as a key player in the region. Agarwal said the move will also help in taking investee companies of Nazara – The ‘Friends of Nazara’ network – to the MENA region.
These companies include Nodwin Gaming and SportsKeeda in esports, Next Wave Multimedia (developer of World Cricket Championship (WCC) – the largest mobile-based cricket simulation game) and Paper Boat Apps (developers of the popular gamified learning app Kiddopia). Nazara will focus on markets like Saudi Arabia, Turkey, and the UAE in the region. Publishme, led by zgr zalp – the former publishing head for emerging markets with EPIC Games – has a strong clientele including Garena, My. Games and Lokum Games. It also works with several brands in Turkey and MENA region including Turkcell, RedBull, Hepsiburada.com, KFC, Asus and Yemeksepeti.”MENA is one of the fastest-growing gaming markets, with an estimated market size of USD 4.8 billion and has over 160 million gamers in the region (of which 100 million are mobile gamers). Our alliance with Nazara offers a unique blend of the network, global reach, and local capabilities to further the growth of the gaming industry in the region
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Daily Market Analysis – 17th June 2021 (Dividend)
1. The government has mopped up 26,104.37 crores as dividend from 23 listed PSUs in FY21 so far, a 123.63% increase over the previous fiscal year, bringing welcome relief to a treasury that has taken a massive hit from two waves of the coronavirus pandemic. Bharat Petroleum Corp. Ltd (BPCL) leads the largest dividend-paying companies for the fiscal year 2021 with a dividend of ₹8,759.71 crores to the government followed by Coal India Ltd (6,520.66 crores), Indian Oil Corp. (5,817.95 crores), State Bank of India (2,031.95 crores) and GAIL India (1,142.29 crores).
According to Jasani, the guidelines issued by the department of investment and public asset management (Dipam) in 2016 that every PSU would pay a minimum annual dividend of 30% of profit after tax or 5% of the net worth, whichever is higher, will push PSUs to declare higher amounts as dividends.
Dividends from PSUs have been used by governments in successive years to raise revenues and bridge the fiscal gap that would have arisen due to various reasons including a shortfall in divestment revenues.
2. The Union Cabinet is set to take up a proposal to permit 100 percent foreign direct investment (FDI) in state-owned oil refiners to clear the regulatory path for the privatization of Bharat Petroleum Corporation Ltd (BPCL), according to government officials. The divestment of the Centre’s 53 percent stake in BPCL is a key part of the former’s disinvestment target of Rs 1.75 lakh crore for FY22.
3. TPG-backed Dodla Dairy intends to raise Rs 520.17 crore at the higher end of the price band of Rs 421-428 per equity share. The IPO comprises a fresh issue of Rs 50 crore and an offer for sale of up to 1,09,85,444 equity shares by TPG Dodla Dairy Holdings Pte Ltd and promoters.
Dodla Dairy is an integrated dairy company based in south India. Its primary source of revenue is the sale of milk and dairy-based value-added products (VAPs) in the branded consumer market. Amongst private dairy players with a significant presence in the southern region of India, it is the third-highest in terms of milk procurement per day and second highest in terms of market presence across India among private dairy players.
Dodla Dairy has delivered consistent growth over the last three financial years both in terms of financial and operational metrics. Its revenue from operations, EBITDA and profit after tax for nine months period ended December 2020 were Rs 1,413.5 crore, Rs 206.5 crore and Rs 116.38 crore respectively.
The initial public offering has been subscribed 1.40 times on June 16, the first day of bidding. Dodla Dairy has a good potential for the future and is also available at a reasonable valuation compared to its peers.
Also read: Wealth Habits – Learn, Unlearn and Relearn – Fintoo Blog
4. The Federal Reserve on Wednesday considerably raised its expectations for inflation this year and brought forward the time frame on when it will next raise interest rates.
US FED MEDIAN PROJECTIONS SHOW TWO RATE INCREASES BY END-2023. INFLATION IS EXPECTED TO BE 3.4% IN 2021 (PREVIOUSLY 2.4%), 2.1% IN 2022, AND 2.2% IN 2023,
US INTEREST RATE DECISION ACTUAL 0.25% (FORECAST 0.25%, PREVIOUS 0.25%). RATES ARE EXPECTED TO REMAIN UNCHANGED UNTIL 2021, ACCORDING TO ALL FED OFFICIALS.
The FED Predicts GDP expectations for this year to 7% from 6.5%, 3.3% IN 2022, AND 2.4% IN 2023, WITH A MEDIAN LONG-RUN PROJECTION OF 1.8% (PREVIOUSLY 1.8%). The unemployment estimate remained unchanged at 4.5%
FED LEAVES ITS BENCHMARK RATE UNCHANGED AND CONTINUES TO PURCHASE $120 BILLION IN BONDS. However, the central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying program
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Daily Market Analysis – 16th June 2021 (Company)
- Sona Comstar’s ₹5,550 crore IPO subscribed 27% on day 2. At a price band of ₹285-291, the IPO of the company is roughly valued at 76 times one-year forward earnings, making it one of the most expensive issues to hit the primary market in recent times. Analysts said Sona BLW is a play on the electric vehicle theme. They said while the IPO valuation appears rich but the auto component maker is a consistent performer. They are bullish on the counter.
- Ruchi Soya said that it has acquired the biscuits business from Patanjali for ₹60 crores and under the agreement, it is required to pay the balance 75 percent of the consideration for acquiring the business to its promoters within three months from the sale that took place in May. Ruchi Soya is aiming to raise ₹4,300 crores from a follow-on public offer. The company plans to use ₹2,663 crores for repayment of the company’s borrowings and ₹593.4 crores for working capital. The remainder of the proceeds will be used by the company for general corporate purposes.
- India’s exports rose by 69.35% to USD 32.27 billion in May, driven by healthy growth in sectors such as engineering, petroleum products, and gems and jewellery, even as the trade deficit widened to USD 6.28 billion, the lowest in 8 months. Imports in May were up 73.64% year-on-year to $38.55 billion. Exports to USA, UAE & Singapore recorded the highest jumps. Exports of engineering, petroleum & gems & jewelry were worth $8.64 billion, $5.33 billion & $2.96 billion respectively.
Also read: How to Save Income Tax? Tax Saving Guide. – Fintoo Blog
- The Pension Fund Regulatory and Development Authority (PFRDA) also increased the maximum age of entry into the National Pension System (NPS) from 65 to 70. The exit age limit has also been extended to 75 years. The regulator has allowed subscribers to withdraw the entire accumulated pension wealth without purchasing an annuity if the pension corpus is less than ₹5 lakh. Currently, NPS subscribers having a corpus of over ₹2 lakh at the time of retirement or attaining the age of 60 years need to buy an annuity, offered by insurance companies, on a mandatory basis.
- Tata Motors Limited announced on Monday that it will raise ₹500 crores by offering 5,000 Non Convertible Debentures (NCDs). The face value of the security is ₹10 lakh each. The date of redemption for these NCDs is May 29, 2026, with the period of maturity being 1,808 days. The interest will be payable annually and on redemption. These will be offered on a private placement basis and are rated, listed, unsecured and redeemable.
- Reliance Jio has commenced 5G trials in Mumbai as it races with rival Bharti Airtel to introduce mobile technology in India. While Jio’s trials in Mumbai are being carried out using indigenously developed technology, the company has tied up with multinational vendors, including Ericsson, Nokia, and Samsung for trials in Delhi, Pune, and Gujarat.
- The annual retail inflation rate rose 6.30% year-on-year in May, up from 4.29% in April and sharply above analysts’ estimate of 5.30%. The wholesale price inflation rate rose 12.94%, its highest in at least two decades. India’s economy grew 1.6% in the March quarter compared with the same period a year earlier, but that was before a massive second wave of infections hit the country which prompted fairly stringent lockdowns across most states causing another round of job losses and a significant dent to demand.
- ICICI Bank raises ₹2,827 crores by issuing bonds on a private placement basis. The bonds carry a coupon of 6.45% per annum payable annually and were issued at par. The allotment date is June 15, 2021. The redemption date of the bonds is June 15, 2028.
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Daily Market Analysis – 14th June 2021 (Adani)
- The infrastructure push in the country has been gaining momentum steadily. Last week Reliance Infra raised up to Rs.550 crore by preferential allotment of shares to reduce debt and fund future growth. Adani group has incorporated a new wholly-owned subsidiary Adani Cement Industries increasing the competitiveness in the booming cement sector which is expected to do well in the coming years. India’s robust domestic demand is one of the major reasons for the bullishness in the cement sector. ICICI raised Rs.3,001 crore via infrastructure bonds which is another reflection of the expectations of infra development in the country.
- Adani Group stocks pummeled between 5%-20% as reports pertaining to the NSDL freeze on 3 FPI accounts surfaced. This freeze makes it impossible for the three FPI accounts – Abula Investment Fund, Cresta Fund and APMS Investment. Together, they own over Rs.43,500 crore worth of shares in four of the Adani group companies. The promoter group holds a majority stake in Adani Transmission (74.92%), Adani Enterprises (74.92%), Adani Total Gas (74.80%), and Adani Green (56.29%). The NSDL freeze is reportedly due to an “Inadequate beneficial ownership document” under the Prevention of Money Laundering Act (PMLA). There is a need to remain cautious as the impact of this freeze could have a long-term bearing on the future of the Adani group and its corporate governance standards.
- The Indian IPO market is expected to see a bumper revival after a slow FY 2020-21. The bullish market has set up a great platform for the IPO season. Over a dozen financial services companies have filed draft papers for IPO issues worth close to Rs.55,000 crores. The major chunk of this issue will come from the record-breaking Paytm IPO which plans to raise upwards of Rs.22,000 crore from the issue. This week alone will see 4 companies launching their IPOs worth Rs.9,123 crore collectively. Shyam Metalics and Sona BLW Precision Forgings will launch on Monday while Krishna Institute of Medical Sciences and Dodla Dairy will open for public subscription on Wednesday. Meanwhile, LIC is looking to raise up to Rs.25,000 crores from anchor investors in the IPO issue.
Also read: New Income Tax Portal For e-Filing 2.0 | Portal Features & Benefits (fintoo.in)
- Auto companies cut down on costs to increase the spending in R&D towards Electric Vehicles (EVs) by around 6.5%. Mahindra and Mahindra are expected to spend Rs,3.000 crores as Capex towards EVs in the next three years. Tata Motors will look to spend the same amount this year focused on EVs. Tech companies including Tata Elxsi and Capgemini have been bagging new projects to support this R&D initiative by the Automakers. Infrastructure development still remains one of the major laggards in this segment. India is expected to see major growth over the next five years in the EV segment.
- Axis Bank is planning to increase its stake from 13% to 20% in max life insurance company over the next 12 to 18 months. According to the deal, there will be no change in the brand but Axis bank will become the joint venture partner stated in the tagline. Max life renewal premium has been on the growth and so is the product line with 14 new product launches and variants over the last year. Max life also recorded a 22% rise in their total new business premium to Rs.6,826 crores.
- Oil prices hit an all-time high again for the third week. The outlook for demand has improved drastically. Brent crude was up 0.2% rising by almost 1.1% in the last week. US west texas intermediate was also up by 0.2% rising by 1.9% in the last week. Goldman Sachs expects the Brent crude prices to touch $80 per barrel with the increase in worldwide economic activity. OPEC+ has kept the supply under control since the demand was wiped out in 2020. There needs to be a supply revival from OPEC+ to meet the rising demands to help keep the oil prices under check.
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Daily Market Analysis – 11th June 2021 (Tata)
Tata Digital is set to acquire majority stake in e-pharmacy 1MG
This investment is in line with Tata group’s vision of creating a digital ecosystem that specifically addresses consumer needs across various categories. This is the second major investment of the company in an Indian startup. Recently they announced a $75 million investment in fitness startup Curefit and the current deal is a primary and secondary share sale worth $250-$270 million along with other investors. $160 million will be in the form of primary infusion into the company and Tata Digital is expected to own almost 60% in 1MG and will increase its shareholding in the e-pharmacy startup in the coming months. With this fundraising, 1MG’s valuation is expected to cross $450 million from $270 million before the deal.
SEBI is considering one more option/avenue for retail investor to buy shares in IPOs
SEBI – India’s capital market regulator may open one more avenue for retail investors to pay for shares that are offered in IPOs. The talk is going on with the central bank and payment banks so that these payment banks can accept money from IPO applicants though they are not allowed to accept IPO subscriptions. The main purpose of this is to ease out the efforts involved in subscribing to new share sales and allow investors in smaller cities and towns to buy stocks. Also, involving payment banks in this process can actually make the entire process quicker and faster as app-based payment reach is much higher in Tier 2 or Tier 3 cities.
Home and personal care segment – Galaxy Surfactants Limited
In an interview with Mr. Saurabh Mukherjea – Founder & Chief Investment Officer of Marcellus Investment Managers, he was asked to identify a champion from the mid and smallcap space. According to him, the cleaning and personal care segment is something that can be recommended and he has identified one company in this segment i.e. Galaxy Surfactants Limited. This is the largest manufacturer of surfactants in the country and supplies to companies like Unilever, P&G and so on. The company has a large business which goes into personal care products like lotions and skincare and so on. The company has a substantial export franchise. Profit after tax (PAT) has been at around 20-22 percent for the last 5 years with a strong balance sheet, clean management team, and strong R&D capability.
Sharp decline in auto registrations
Retail sales of automobiles were badly hit in the month of May as vehicle dealerships shut across most states because of localised lockdowns imposed by state governments. Vehicle registrations fell 55% to 535,855 units on a month-on-month basis this May. This decline is even more noticeable at 70.6% when compared with 1,822,566 units sold in May 2019. Retail sales of vehicles were negligible in May 2020 due to the nationwide lockdown. This time not only urban markets but rural areas are also badly hit.
Registrations in different auto segments:
- Vehicle segment – dipped 59% to 85,733 units
- Two-wheeler – fell by 52.5% to 410,757 units
- Commercial vehicles – fell by 65.9% to 17,534 units
- Tractor sales – fell by 56.6% to 16,616 units in May
Also read: Quick tips for financial planning in 2021 – Fintoo Blog
India’s agriculture exports have shown a jump of 17.34% in FY21
India is seeing growth in the export of cereals, non-basmati rice, wheat, millets, maize and other coarse grains in spite of pandemic disruptions which is driven by the government’s policy-level interventions as well as the expansion of products into new markets.
The export of agriculture has been stagnant for the last three years. However, the same during 2020-21 grew 17.34% to $41.25 billion. In 2017-18 and 2018-19, it was around $38 billion and thereafter declining to $35.16 billion in 2019-20.
Major contributor towards this growth is “various programmes from agriculture policy December 2018.
Highest growth has been recorded in Indonesia, Bangladesh and Nepal.
IIFL Home Finance plans to raise Rs. 1,000 Cr via bond sale
IIFL Home Finance is planning to raise Rs. 1,000 Cr in bonds and targeting 18% growth in this fiscal year despite challenges faced by them. The company has solid co-lending arrangements with Standard Chartered Bank, ICICI Bank and Central Bank of India to grow its loan portfolio. As of March 2021, its loan portfolio stood at Rs. 14,439 Crore. The AUM by way of securitization and off-balance sheet exposure was at Rs. 20,700 Crore. The company is seeking approval from SEBI for the bond issue. Issuing non-convertible debentures are one of the options the company is looking for fundraising.
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