Daily Market Highlights JUN 22

morning main Daily Market Highlights JUN 22

Previous Day Market

Sensex closed at 52,574.46 up by 230.01points

Nifty closed at 15,746.50 up by 63.15 points

IIFL Home Finance proposes to raise a sum of Rs.5,000 crore to give a leg up to its lending business. The fund raising will be done through the issue of NCDs. The draft prospectus for the bond issue has already been filed with the exchanges. The face value of each NCD will be Rs.1,000 and the amount is likely to spread over a number of tranches. The company has a comfortable CRAR Tier-1 capital ratio of 19.6%. The focus of the company is to provide home loans to first-time home buyers in lower income segments.

The central board of SBI approved the raising of Rs.14,000 crore through the issue of Basel-III compliant bonds, likely to be denominated either in INR or USD. This pertains to the fiscal year FY22. This will help to further spruce up the Tier-1 capital of SBI. Many rating agencies in the recent past have raised some concerns over the potential stress in the balance sheet of banks due to deteriorating asset quality and its impact on performance and profitability. SBI had reported smart top line and bottom line growth in Q4.

Securities Appellate Tribunal or SAT has allowed PNB Housing to go ahead with its scheduled EGM on Tuesday. While PNB Housing can go ahead with its voting on the Rs.4,000 crore capital infusion by Carlyle, the court has instructed PNB Housing not to disclose the voting result on the resolution until further directions. Even NSDL must keep the voting pattern confidential. The matter comes up for hearing on 05 July when the SAT will announce its decision on the need for a valuation report by a registered valuer.

According to a report by Goldman Sachs, Reliance Industries had the potential to show 10X growth in pre-tax profits from the retail business in the coming decade. Goldman was emphatic that retail, driven by ecommerce, would be the big growth engine for RIL in the coming years. Goldman sees a 6-fold increase in the penetration of organized retail by FY30 with 15% market share gain for RIL. Goldman estimates RIL to have 50% share of online grocery by FY25, translating into GMV of $35 billion. EBITDA could grow 10X.

Maruti Suzuki will hike prices of its cars in the second quarter of the current fiscal to compensate for the sharp spike in input costs. The sharp spike in metals and alloys and most auto related inputs, including chips, has resulted in a sharp spike in cost of production. However, Maruti has been silent about the actual quantum of price hike. Maruti is India’s largest passenger car franchise and sells a range of models ranging from the entry-level hatchback Alto to S-CROSS with a price spectrum ranging from Rs.3 lakh to Rs.13 lakh.

Centrum rallied 16% to Rs.58.50 after Centrum Financial Services received an in-principle approval from RBI to set up a Small Finance Bank or SFB. This is a pre-condition for Centrum to take over the operations of PMC Bank. One of the major investors in Centrum Capital is former Standard Chartered Bank India head, Jaspreet Bindra. Centrum Financial, along with Bharat Pe, will infuse Rs.1,800 crore into the SFB to start operations. This deal will bring much needed relief to the beleaguered deposit holders of PMC Bank.

Shares of Bandhan Bank continued its rally and surged another 7% to Rs 338 after the Assam government signed an agreement with MFIs to regularise stressed borrowers and repay entire loans of highly stressed borrowers. The Assam government will also incentivize prompt repayments with incentives. This package will cost the Assam government Rs.8.250 crore. This is likely to be a big positive for Bandhan Bank, which has its biggest MFI network in the states of Assam and West Bengal. This will also protect asset quality.

Monday was a bullish day for Adani stocks after the sharp correction last week. Adani Ports rallied 7% while Adani Total Gas, Adani Power and Adani Transmission hit 5% upper circuit. The incubation company, Adani Enterprises, was up 6% on Monday. The markets took some comfort from a promoter group company infusing Rs.1,100 crore into buying stakes in the companies. Last week saw Adani group shares losing $13 billion in value after NSDL froze demat accounts of key FPIs with large exposure to Adani group.

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