Previous Day Market
Sensex closed at 52,551.53 up by 76.77 points
Nifty closed at 15,811.85 up by 12.50 points
Inflation came in aggressively higher than most estimates and nearly 200 basis points higher than the April number at 6.3%. Even WPI inflation came in sharply higher at 12.94%, largely spurred by fuel and edible oils. Fuel inflation alone stood at 11.58% due to the sharp spike in the prices of petrol and diesel. Food inflation bounced from 1.96% to 5.1% in May as the weak base effect also played a role. Ironically, the spike in inflation in rural India was much sharper, picking up from 3.75% in Apr-21 to 6.50% in May-21.
Coal India reported a flat to a marginal decline in net profits at Rs.4,586 crore for the Mar-21 quarter. Revenues were also lower on a YoY basis at Rs24,511 crore for the Mar-21 quarter. The board of directors has recommended a final dividend of Rs.3.50 per share taking the total dividend for the year to Rs.16 per share. During the quarter, the coal production fell marginally to 203.42 MT while CIL’s offtake also was flat at 164.33 MT. CIL has a virtual dominance in coal mining and accounts for 80% of India’s coal output.
The day started with most Adani group shares correcting sharply after media reports indicated that NSDL had frozen 3 NSDL accounts of FPIs with joint exposure to the Adani group worthRs.43,500 crores. For example, Adani Ports fell 8.36%, Adani Enterprises 6.26%, Adani Total Gas 5%, Adani Transmission 5%, and Adani Green Energy 4.2%. Overall, the sharp fall wiped out Adani Group’s market value to the tune of Rs.53,500 crore. However, NSDL denied such action and the Adani group dismissed such reports as baseless.
After imposing huge penalties on Templeton MF and Vivek Kudva, SEBI has come down heavily on most of the senior officials of Templeton MF for summary shuttering of 6 debt schemes without giving adequate notice to investors. SEBI imposed Rs.3 crore penalty on FT Trustees Services and Rs 2 crore each on CEO Sanjay Sapre and CIO Santosh Kamath. Five other fund managers also have to shell out Rs.1.50 crore while the compliance officer has to pay Rs.50 lakhs. SEBI has criticized the high yield strategies of the fund.
Amara Raja Batteries announced that energy and mobility would be its strategic focus to capitalize on emerging opportunities. Towards this end, Amara Raja will expand its lead-acid batteries business and establish a new energy SBU encompassing lithium cells, EV chargers, energy storage systems, etc. The company is clearly rethinking its positioning in light of the huge changes happening in the global auto segment. The board is optimistic about the potential of new energy and the scope for lead-acid batteries.
Lupin Healthcare UK secured regulatory approval to market Luforbec. This is the first branded generic of asthma inhalation drug Fostair. This generic Fostair is a combination of beclometasone dipropionate and formoterol fumarate dihydrate. Fostair is already being marketed in the US by Chiesi Farmacehtici, an Italian pharma company. This license to Lupin is only for marketing in the UK. The launch of Luforbec will result in significant savings for the UK government. In the last 1 year, UK NHS spent £179 million acquiring Luforbec.
Ruchi Soya, backed by Baba Ramdev, has filed DRHP with SEBI to raise Rs.4,300 crore via the IPO route. It plans to offer 50% of the issue size to QIBs, 15% to NIIs, and 35% to retail. The proceeds of the issue will be used to redeem some of its outstanding debt. As of May 2021, Ruchi Soya had borrowings of Rs.3,127 crore. The company is already profit-making. Ruchi Soya is a pioneer of soya foods in India under the brand name Nutrela. Post the buy-out by Patanjali, Ruchi Soya has got access to its all-India marketing network.
GOI is planning to make it easier for global investors to acquire a controlling stake in BPCL. If cleared by the Cabinet, overseas funds will not need government approval to buy up to 100% in the company. But, this will be a special case and the normal limit of 49% will otherwise remain. India has a massive target of collecting nearly $24 billion from divestments this year and the sale of the government’s 53% stake in BPCL is one of the important steps to this target. BPCL reported a net profit of Rs.11,940 crore in the Mar-21 quarter.
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