Daily Market Highlights JUL 09

1 Daily Market Highlights JUL 09

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Zomato fixed the IPO price band for its Rs.9,375 crore IPO in the range of Rs.72 to Rs.76 per share. The issue will open on 14 July and close for subscription on 16 July. Zomato is backed by the Ant Group of China. In the first half of 2021, India saw Rs.32,000 crore collected from 22 IPOs so far. The month of Jul-21 alone is expected to equal that amount with the help of mega IPOs like Zomato, Aadhar Housing, and Nuvoco Vistas slated to hit the IPO market in Jul-21. India’s food delivery market is currently pegged at $4.2 billion.

TCS announced strong YoY growth in numbers but sequentially TCS reported lower operating profits and net profits for the Jun-21 quarter. TCS reported an 18.5% growth in net sales at Rs.45,411 crore and a 28.54% growth in net profits at Rs.9,008 crore. While the EBITDA margin stayed above the 25% mark, it was nearly 133 bps lower than the sequential Mar-21 quarter. As of Jun-21, TCS had an order book position of $8.1 billion and the lowest attrition rate at 8.6%. India revenues fell sequentially by 14.5% in the Jun-21 quarter.

If the vehicle output numbers announced by SIAM were robust for Jun-21, there is dual confirmation with FADA confirming solid dealer sales too. The important parameter of vehicle registration across categories was up 22.62% YoY in Jun-21. A total of 12,17,151 vehicles were registered across India on Jun-21. FADA confirmed that July was also seeing good traction in terms of enquiries and bookings. The reopening post-COVID 2.0 led lockdowns have helped the numbers to pick up. However, the delta variant could be a spoiler.

Macrotech Developers (Lodha Group) reported 88% higher sales bookings for the Jun-21 quarter at Rs.957 crore, despite the pandemic risks. Even the collections in the Jun-21 quarter improved by almost 4.5 times at Rs.1,714 crore. For the fiscal year FY21, the sales bookings had fallen to Rs.5,968 crore compared to Rs.6,570 crore in FY20. As promised in the IPO prospectus, Macrotech reduced its debt by Rs.3,600 crore from the issue proceeds. The company targets to reduce the net debt to Rs.10,000 crore by end of FY22.

Both the IPOs that opened on 07 July appear to be getting a good response in the IPO market. The Rs.963 crore IPO of G R Infraprojects got subscribed 5.90 times at the end of the second day, getting applications for 46.57 million shares against 7.90 million shares on offer. The retail portion was subscribed 7.49 times. The other IPO of Clean Science and Technology was subscribed 4.38 times by end of the second day, getting applications for 52.69 million shares against 12.3 million shares on offer. Both IPOs will close on Friday.

Net inflows into equity funds in June 2021 fell by half as redemption pressure mounted with investors rushing to book profits. Net inflows into equity funds stood at Rs.4,609 crore in Jun-21 compared to Rs.9,236 crore in May-21. While overall flows were tepid, SIP flows into mutual funds in June 2021 stood robust at Rs.9,155 crore. Among debt funds, floater funds were sharply in demand. In the hybrid segment, arbitrage funds continued to attract interest. MF AUM touched an all-time high level of Rs.33.66 trillion.

Among the many changes underway at LIC, the insurer has decided to have a CEO and a managing director and will scrap the chairman’s position altogether. This will position LIC more favorably as it prepares for the prestigious IPO later this fiscal year. The government is expected to invite bids from merchant bankers this month for managing the LIC disinvestment. The IPO is proposed to be launched around January 2022. DIPAM has appointed Milliman Advisors as the actuarial advisors to assess the embedded value of LIC.

Even as people had almost forgotten about the Reliance / Future group deal, Supreme Court has agreed to hear the case on 20-July. The deal had got delayed after Amazon objected to the deal since, by virtue of its stake in Future Coupons, Amazon was automatically entitled to be given the first right of refusal in the acquisition of Future group. Gopal Subramanian will appear for Amazon and Salve for Future Group.

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