Daily Market Highlights Jul 15

2 Daily Market Highlights Jul 15

Previous Day Market

Sensex Closed At 52,904 Up By 134  Points 

Nifty Closed At 15,853 Up By 41  Points

REITs and INVITs are finally coming of age in India with over Rs.55,000 crore raised between them. During FY21, while INVITs raised Rs.40,500 crore, REITs managed to collect close to Rs.14,400 crore. The AUM of REITs and INVITs is now close to Rs.164,000 crore. While REITs and INVITs were officially allowed by SEBI in 2014, they only took off in the last 3 years. This includes the monies collected by the unlisted INVITs too. Out of the 15 INVITs and 4 REITs registered, only 6 INVITs and 3 REITs are listed on stock exchanges.

Infosys surprised the market on Wednesday by raising its revenue growth guidance for FY22 to the range of 14-16%, a 200 bps upgrade. For the Jun-21 quarter, Infosys reported net profits of Rs.5,195 crore; up 23% on yoy basis but just about 2.3% sequentially. During the quarter, revenues were up 17.9% at Rs.45,411 crore. The June quarter represents Infosys’ best growth in decades. The big news was $2.6 bn deal value during the quarter. Currently, Infosys trades at 22X P/E, a 5% discount to TCS on FY24 earnings.

Zomato IPO saw robust demand on the first day of the issue. The IPO attracted demand for 75.60 crore worth Rs.5,700 crore against the issue size of 71.92 crore shares on offer, resulting in oversubscription to the tune of 1.05X. The retail portion, which has 10% allocation in the IPO, was subscribed 2.7 times. But, most of the QIB and HNI bids typically come in on the last day only. The anchor demand shows the huge appetite for the stock among institutions. The Zomato issue will close for subscription on Friday 16 July.

In a deft move, RBI barred Mastercard from onboarding new domestic customers from July 22, due to non-compliance with guidelines on local data storage. Mastercard and Visa are two of the largest card franchises into which most of the global banks log into. The ban was in the light of the fact that Mastercard had not localized its storage of Indian customer data as per RBI guidelines, despite being given enough time. RBI has already barred AMEX and Diners Club from adding new customers for the same reason.

The S&P BSE IPO index hit a new high of 12,201, after recent listings like Happiest Minds, CAMS, Route Mobile and MTAR Technologies clocked strong gains. The index is a unique barometer of the performance of IPOs post listing. In the last 1 month, the BSE IPO index is up 14%; outperforming the Sensex and even the mid-cap indices by a huge margin. Six recent IPOs touched lifetime highs during July including, Angel Broking, CAMS, Gland Pharma, Happiest Minds Technologies, Laxmi Organic and Macrotech Developers.

Jerome Powell, Chairman of the US Federal Reserve, in his testimony suggested that inflation may remain elevated for more time before moderating. However, Powell did not signal any imminent shift in the Fed’s ultra-low-interest rate policies. Powell reiterated that inflation was driven by temporary supply chain constraints and had to be taken with a pinch of salt. Powell also reiterated that the Fed will keep the Fed rate pegged near zero until maximum employment is reached and inflation consistently exceeds 2% mark.

Marico Ltd, the company behind the popular Parachute brand, announced that it had acquired 60% stake in Apcos Naturals, the owner of Ayurvedic beauty brand “Just Herbs”. The consideration for the deal was not disclosed, except that the equity stake would be acquired over 2 years. Marico will acquire 52.4% stake by Jul-21 and 7.6% by Mar-23. “Just Herbs” is a line of Ayurvedic skin and hair care offerings made from organic and wildcrafted ingredients. This syncs with Marico’s larger plan to build digital-only brands.

Reliance Power got shareholder approval to issue shares and warrants worth Rs.1,325 crore to Reliance Infrastructure, on preferential basis. This will help Reliance Power to reduce its stand-alone debt. In exchange, Reliance Power will allot 59.5 crore shares and 73 crore warrants convertible into equal equity shares of the company via conversion of debt. Reliance Infrastructure will increase its stake in Reliance Power to 38.24% post conversion of warrants. RPOWER will reduce its overall debt by Rs.3,200 crore.

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