Previous Day Market Update
Sensex closed at 56124.72 up by 175.62 points
Nifty closed at 16705.20 up by 68.30 points
For the week ended 27th August, a total of 8 out of the top-10 Nifty stocks by market cap gained Rs.190,032 crore in market value. Two of the biggest heavyweights; TCS and Reliance, led the rally. Among the big gainers, TCS gained Rs.60,184 crore, Reliance gained Rs.51,064 crore, HDFC Bank Rs.19,651 crore and Bajaj Finance Rs.18,518 crore. Other gainers included Hindustan Unilever, ICICI Bank, Wipro and SBI. Among the losers, Infosys saw its market slip by Rs.10,053 crore, while HDFC also sustained small losses.
IDFC First Bank is planning an aggressive 25% growth in its retail loan book on a sustained basis. In fact, IDFC Bank expects 40% of its loan book to be accounted for by mortgage loans. For FY21, IDFC First Bank had reported net profits of Rs.452 crore compared to net loss of Rs.2,864 crore in FY20. IDFC First bank was formed by the merger of Capital First and IDFC Bank with Vaidyanathan taking over as the CEO of the new entity. The bank has admitted that its profitability is not visible due to its legacy liabilities from IDFC.
FPIs were net investors of just Rs.986 crore in the Indian equity markets in August till date, with 2 more trading days to go. However, the infusion in the debt segment at Rs.13,494 crore was robust. As a result, the overall net inflow for August stood at Rs.14,480 crore. The foreign flows across emerging markets did tend to slow after the minutes of the previous Fed meet hinted at tapering by end of the year. Now that has been confirmed by Jerome Powell at the Jackson Hole Symposium. Rest of Asia has also seen inflows.
Just two weeks after government announced the scrapping of the retrospective tax legislation, the centre has released detailed draft rules to support the legislation. The rules clearly state that Indian government will not proceed with retrospective tax demands subject to the other party withdraw all legal cases and also give an undertaking not to pursue similar cases in the future too. This will bring an end to some high profile retrospective tax cases like Cairn and Vodafone. All amounts shall be refunded without interest.
The sixth tranche of Rs.2,918 crore will be distributed to the unitholders of the 6 shuttered schemes of Templeton Mutual Fund on 01-Sep. With this pay-out, Templeton would have repaid Rs.23,999 crore or 95.18% of the AUM as on 23-Apr-2020, the date of shuttering the schemes. SBI MF has been tasked with distributing the money to unitholders and equivalent units of these debt schemes will be extinguished. However, this disbursement is just of the AUM as on 23 April and does not include opportunity cost.
Tata Steel will undertake capex of Rs.8,000 crore in FY2021-22. Confirming the news, CEO T V Narendran averred that the amount will be spent on expansion of the Kalinganagar plant as well as expansion of mining and recycling operations. This will be over and above the Rs.3,000 crore that Tata Steel will spend on its European operations in this fiscal. Tata Steel is currently expanding the capacity of its Kalinganagar plant by 5 MTPA. In August, Tata Steel commissioned its first steel recycling plant at Rohtak in Haryana.
After a one-week lull, the IPOs are back in action. The IPOs of Vijaya Diagnostics and Ami Organics will open be open from 01-Sep to 03-Sep and will collectively raise Rs.2,465 crore between them. While Vijaya Diagnostics will be entire an offer for sale, Ami Organics will be a mix of fresh issue and an offer for sale. The last two weeks saw some disappointing response to IPOs like Nuvoco Vistas and Chemplast Sanmar as well as a spate of below par listings. In the current fiscal, 20 IPOs have mopped up Rs.45,000 crore.
The sixth tranche of RBI Sovereign Gold Bonds for FY22 and last issue of H1 will open for subscription on 30-Aug and close on 03-Sep. The issue price has been fixed at Rs.4,732 per gram of gold, with an additional discount of Rs.50 per gram for digital applications. Gold bonds will be sold through designated post offices, SHCIL, recognized stock exchanges and by banks; except SFBs and payment banks. Like in the past, the SGB will have a tenor of 8 years with exit window after 5 years. SGB will carry annual interest rate of 2.5%.