Daily Market Update Apr 27

Untitled 5 Daily Market Update Apr 27

Previous Day Market

Sensex closed at 48,386.51 up by 508.06 points
Nifty closed at 14,485.00 up by 143.65 points

RBI stipulated that private bank CEOs and MDs will have a maximum tenure of 15 years. This looks like a reaction to the Yes Bank case last year and could impact banks like Kotak Bank. In fact, the tenure will be limited to 12 years with an extension of up to 15 years at the sole discretion of RBI. This restriction is intended for bank CEOs who are also promoters. Non-promoter CEOs can offer themselves for re-appointment after the completion of the 15-year term. RBI has given banks time until 01-Oct to comply with the guidelines.

Tech Mahindra reported a 34.5% increase in net profit at Rs.1,081 crore for the Mar-21 quarter. However, profits were down 17.4% sequentially. Revenues were up 2.5% at Rs.9,730 crore on BPO revenue boost even as IT revenues were flat. It declared dividends of Rs.30/share. Meanwhile, SBI Cards doubled PAT to Rs.175 crore. The ROA doubled to 2.6% while the ROE was up from 6.5% to 11.2% YoY. While revenues were marginally lower, the gross NPAs spurted from 2.01% last year to 4.99% in the Mar-21 quarter.

Ronnie Screwvala backed online higher education company, Upgrad, raised $120 million from Singapore-based Temasek. Since its inception in 2015, this is the first external funding for Upgrad. The education start-up will use the fresh capital infusion to strengthen its team and to meticulously scale up its global market operations. It will also look to boost tech capabilities and look at inorganic growth opportunities. Upgrad is one of many education companies that have bloomed post the pandemic in the last year.

S&P Global Platts cut India’s 2021 oil demand forecast by 9% to 400,000 bpd. In March 2021, the average demand was 440,000 bpd. According to S&P Global Platts, this demand downgrade was on account of surging COVID cases, triggered lockdowns, and mobility curbs. The agency does not expect the oil demand to pick up any time before June this year. Most oil refiners have also confirmed that they may be forced to scale back crude orders due to the slowdown. Railways and industry demand may be the saving grace.

The IPO of Power Grid INVIT opens for subscription on 29 Apr and the price band has been fixed in the range of Rs.99-100. The issue closes on 03 May. Power Grid will look to monetize five of its power transmission properties in India. The INVIT IPO will include a fresh issue of units worth Rs.4,993 crore while the OFS portion will be worth Rs.2,742 crore, taking the total INVIT IPO size to Rs.7,735 crore. The anchor investor bidding is scheduled for 28 April. There will be a 75% QIB quote and the minimum lot size will be 1,100 units.

Even in the midst of the pandemic resurgence, UBS has identified India as one of the most preferred equity markets. Additionally, China and Singapore markets also figure in this list. Allocation-wise, UBS remains more inclined towards Ems than towards DMs. UBS expects a rally in cheaper segments such as select cyclical and value stocks over the next 12 months. Among the EMs, the least preferred markets for UBS include Hong Kong and the Philippines. UBS expects value stocks to outperform secular growth stocks this year.

Shapoorji Pallonji Group filed a review petition before the Supreme Court challenging its 26-Mar verdict, ruling in favor of the Tata group. The bench led by former Chief Justice Bobde ruled that the ejection of Mistry from the board of Tata Sons was consonant with the law. Legal eagles believe that in such cases the power of review is very limited unless there was an error in judgment. Observers feel that the solution may be to sit across the table as legal wars just go on. Valuation is the biggest stumbling block for a Mistry exit.

The European Commission launched legal action against AstraZeneca for not honoring its contract for the supply of coronavirus vaccines and failing to create a Plan-B to ensure timely deliveries. The action was launched on behalf of 27 member states. AstraZeneca has struggled to ensure timely delivery of the COVID doses. While AstraZeneca had committed 300 million doses to the EU, only 30 million have been delivered. AstraZeneca can only provide 70 million doses in Jun-21 quarter against 180 million committed.

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%name Daily Market Update Apr 27

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