Previous Day Market Update
Sensex closed at 58305 down by 54.81 points
Nifty closed at 17369.30 down by 15.80 points
The latest to hit the IPO market will be Fabindia, which was established in 1960 and sells products of over 40,000 artisans and craftsmen across India. Fabindia is looking at an IPO of $1 billion and the company has indicated it would be a mix of fresh issue and an offer for sale (OFS). Fabindia is expected to submit DRHP documents to SEBI by end of November this year. It is looking at an overall valuation of $2 billion for the IPO and may divest 25-30% in OFS. Premji Finvest and Nandan Nilekani are among early investors.
Foreign portfolio investors or FPIs pumped in Rs.7,605 crore in the first ten days of Sep-21. This includes an infusion of Rs.4,385 crore into equities and Rs3,220 crore into debt. In the month of Aug-21, FPIs had infused Rs.16,459 crore into India but that was predominated by Rs.14,376 crore into bonds. That was driven more by the strength in the rupee and improving spreads of Indian debt over US bonds. The positive reaction of FPIs has largely been after the reassuring words of Jerome Powell at Jackson Hole Symposium.
During the week ended 09-Sep, 5 out of the 10 most valuable companies by value, added Rs.62,508 crore to market cap. Reliance was the star performer for the 3rd week in a row. While RIL added Rs.23,583 crore to market value, Bharti added Rs.15,378 crore, HDFC Rs.12,837 crore and Hindustan Unilever Rs.9,998 crore. SBI gains were marginal. Among losers, TCS lost Rs.18,347 crore, Bajaj Finance Rs.5,825 crore, HDFC Bank Rs.4,429 crore, Infy Rs.3,606 crore and ICICI Bank Rs.3,014 crore. Sensex rose 175 points in the week.
Coal India is facing a coal supply crisis at thermal power stations. CIL has stepped up total supply to 1.71 MT a day during the first 8 days of September, compared to 1.49 MT last year. That is nearly 15% higher. Coal India is looking to augment supplies further to 1.80 MT per day. The crisis arose after nearly 15 GW of power generation had just about 2 days of coal stock left and 11 GW had just 6 days’ supply. The delayed monsoons and state defaults had resulted in CIL regulating its supplies. Global coal prices are up sharply.
Zomato decided to pull entirely out of the grocery delivery business. Clearly, there were too many gaps in order fulfilment, poor customer experience and sharply higher competition from rivals. Zomato expects its Grofers investment to generate better results. Grofers is already into the 10-minute delivery hyperlocal model and Zomato does not see value in reinventing the wheel. Zomato’s competitors like Swiggy and Dunzo have a different model of dedicated dark stores that delivery the groceries in under 30 minutes.
Specialty chemicals companies expect 50% increase in capex this year on robust export demand. The total capital investment this year is estimated at Rs.6,200 crore. In the last 2 years, exports got a boost from China putting environmental clamps on specialty chemicals makers. However, domestic demand and prices have also been very strong. Most Indian specialty chemicals companies have gained from US and EU companies reducing their dependence on China. The segment has grown at 11% CAGR since 2015.
Hindustan Unilever will focus on 3 strategies of driving core portfolio, expanding premium products and accelerating digital capabilities. This was disclosed at the annual investor meet of HUL. The company expects some key trends like product authenticity, hyper-personalization and digital adoption will impact the way people shop in the future. HUL is not only driving digital initiatives on the B2C and B2B side, but HUL is also extensively using data to gain consumer insights and improve its time and speed to market.
Start-up media-focused SAAS outfit, Amagi, raised $100 million from Accel Partners, Norwest Venture and Premji Finvest. These funds bought out the stake of KKR and Mayfield in Amagi. Currently, Amagi works with broadcast and connected TV media clients and offers solutions for content creation, distribution, and monetisation. Amagi will use these funds to expand its global footprint. With 800 channels on its platform, Amagi distributes in 40 countries across cable, connected TV and OTT. Amagi was founded back in 2008.