Previous Day Market Update
Sensex closed at 54277 down by 215 points
Nifty closed at 16238 down by 56 points
Four major IPOs are slated to open for subscription this week. CarTrade and Nuvoco Vistas will open on 09 August while Chemplast Sanmar and Aptus Value Housing will open on 10 August. CarTrade has fixed price band at Rs.1,585–1,618 per share and will raise Rs.2,999 crore. Nuvoco has set price band at Rs.560-570 per share and will raise Rs 5,000 crore. Aptus has set price band at Rs.346-353 per share and will raise Rs.2,780 crore. Finally, Chemplast has set price band at Rs.530-541 to raise Rs.3,850 crore via IPO route.
Legal experts criticized the government decision to withhold payments to Cairn UK, a day after it had legislated to scrap retrospective taxation. The Government had attached dividends and tax refunds due to Cairn UK as well as sold shares of Vedanta in their demat account. Now Finance Ministry has agreed to refund Rs.8,100 crore to Cairn UK. Legal experts were of the view that the bilateral treaty and international arbitration had to be respected. They also felt this move will curtail unnecessary litigation on tax matters.
Foreign portfolio investors or FPIs were net buyers of Rs.1,210 crore in Indian markets in the first week of August. This included Rs.975 crore by way of equity investments and Rs.235 crore of debt investments. This is despite FPIs infusing Rs.5,000 crore in just 2 days last week. In July, FPIs had been net sellers to the tune of Rs.7,273 crore. FPI flows were buoyed by PMI manufacturing, higher GST receipts and limited spread of COVID. However, FPIs continue to be cautious about higher oil prices and firmness of US dollar.
If you look at 10 most valuable companies on Nifty, 9 out of them ended the week with positive gains of Rs.2.23 trillion, with Bajaj Finance being the sole exception losing value during the week. TCS gained Rs.52,767 crore, while HDFC Bank gained Rs.37,563 crore and HDFC Rs.34,174 crore. Among other gainers, Reliance added Rs.34,011 crore, Kotak Bank Rs.24,585, Infosys Rs.17,079 crore, ICICI Bank Rs.10,182 crore, HUL Rs.8,705 crore and SBI Rs.3,525 crore. Bajaj Finance was the exception with small losses in the week.
NALCO, India’s premier producer and exporter of alumina and aluminium, reported multi-fold jump in net profits at Rs.348 crore for the Jun-21 quarter. Its revenues were up 79% at Rs.2,475 crore. During the quarter, NALCO witnessed higher volumes, better price realisation and higher capacity utilisation, with the aluminium vertical seeing a sharp bounce in EBIT for the quarter. For the quarter ended June 2021, production of bauxite, alumina and aluminium stood at 1.761 MT, 0.521 MT and 0.114 MT respectively.
PNB Housing hopes to cut its bad loans once the deadline to go soft on borrowers by the courts ends on August 31. The HFC confirmed they would go on a collection drive. For the Jun-21 quarter, PNB Housing saw gross NPAs jump from 2.7% to 6% yoy, due to COVID 2.0 and legal forbearance as per court orders. PNB Housing wants to pressure clients to pay, where they have the financial capacity to pay. PNB Housing is also currently in the midst of a controversial stake sale deal with Carlyle PE worth Rs.4,000 crore.
Nuvoco Vistas raised Rs.1,500 crore via anchor allotment, a day ahead of its IPO opening on 09 August. The anchor book accounted for 30% of IPO size of Rs.5,000 crore. The shares were sold to 40 participating investors at the upper end of the IPO price band of Rs.570 per share. Participating domestic anchor investors included SBI MF, SBI Life, ICIC Pru MF, Nippon MF, Axis MF, HDFC Life, Mirae MF and Premji Finvest. Participating FPIs included APG AM, CI Funds, TT International, Carmignac, and Wells Capital.
Bank of Baroda posted standalone net profits of Rs.1,209 crore in Q1 against net loss of Rs.864 crore in Jun-20 quarter. Net interest income or NII was up 16% yoy at Rs.7,892 crore. However, lower interest yields meant that total income tapered by 1.43% to Rs.20,022 crore. Gross NPAs were flat at 8.86% while net NPAs were marginally lower at 3.03%. Provisions and contingencies were sharply lower at Rs.4,112 crore, with PCR at 83.14%. Most PSU banks have gained from lower provisioning in the Jun-21 quarter.