Daily Market Update JAN 21

unnamed Daily Market Update JAN 21

The transfer of power finally happened in the US as Trump officially stepped down and Joe Biden was sworn in as the next President of the US. Kamala Harris was sworn in as the vice president. In his first few hours as the President, Joe Biden is expected to sign a flurry of orders. These include executive orders on climate action, immigration and Coronavirus management. Biden is expected to end Trump’s proposal to build a wall along the Mexican border and reverse the ban on US travel imposed on some Muslim nations. He is also likely to rejoin the Paris Climate Accord and the World Health Organization.

The government has proposed to put the 3 Farm Bills on hold for a period of 18 months until an expert committee represented by farmers and government gives its recommendations and charts out a plan of action. However, the farmers have been non-committal and do not want anything short of total withdrawal of the 3 Farm Bills. The farmer unions are expected to deliberate internally on 21-Jan and the government and farmers will have their next round of meeting on 22-Jan. That will be the eleventh round of talks between the farmers and the government over the Farm Bills. Farmers have already refused to participate in any Supreme Court sponsored committee or deliberations with the state on the Farm Bills. Thousands of farmers have been protesting in the outskirts of Delhi for close to two months.

The Indigo Paints IPO has got subscribed 1.9 times overall at the end of the first day of the IPO. There was substantial interest from the retail segment for the IPO. The retail portion got subscribed 3.3 times while the HNI component got subscribed 1.1 times. The QIB portion has been subscribed just 0.1 times but that normally comes in only on the last day. The anchor placement worth Rs.348 crore on 19-Jan is an indication of the institutional appetite for the stock. Indigo Paints is India’s fifth largest paint maker in the decorative paints segment and will be using the fresh funds for expansion of its Pudukottai plant.

SEBI has given Schneider Electric 6-months ultimatum to list on one of the national stock exchanges or provide an exit to shareholders under the delisting norms. Schneider Electric is a leading manufacturer and designer of standard enclosure systems. It was earlier listed on the Bangalore Stock Exchange and the Pune Stock Exchange. SEBI has noted that the company has not been in compliance of its provisions requiring such companies to either list on a national exchange system or give exit. SEBI has also instructed NSE to monitor the compliance of the company with the order; to either list or delist fully.

The IRFC IPO, which closed for subscription on Wednesday, was oversubscribed 3.46 times overall. There was good demand seen from retail and institutional investors. While the retail portion got 3.6 times subscription, the QIB portion was subscribed 3.8 times. Against the issue size of 124.75 crore shares as part of the public issue, IRFC has received applications for 432 crore shares. The overall size of the issue was Rs.4633 crore and considering the oversubscription the pricing is likely to happen at the upper end of the IPO price band. The HNI segment lagged, getting only 2.67 times IPO subscription.

The Fintech space may have its latest competitor with deep pockets and a formidable marketing network. Bajaj Finance plans to get into the highly competitive payments business in India. It plans to launch Bajaj Pay for its customers in the fourth quarter of the current fiscal year. This will offer payment solutions via UPI, EMI Cards, credit cards and other pre-paid instruments. With digital payments picking up substantially during the pandemic and the volume of UPI payments surging to Rs.4 trillion in Dec-20, Bajaj Finance sees a huge opportunity here. Apart from the general payment offerings for clients, it is also planning a payment offering for merchants. Bajaj Finance will follow up its payment push with the launch of 5 unique and proprietary market places, which will cover broking, insurance, EMIs and health.

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