Daily Market Update MAR 5

Untitled 5 Daily Market Update MAR 5

Previous Day’s Market Update

Nifty  closed at 15080.75 down by 164.85 points

Sensex closed down by 598.57 points

IPO mania appears to continue in India as the Rs.597-crore IPO of MTAR Technologies was subscribed 10.27 times at the end of the second day, with huge retail subscriptions. MTAR received bids for 7.45 crore shares against an offer size of 72.6 lakh shares. While retail was subscribed 16.55 times, HNI 8.04 times, and QIB just 0.96 times. MTAR has already raised Rs.179 crore from anchor investors ahead of the IPO. MTAR, based out of Hyderabad, is a precision engineering company that caters to the nuclear, aerospace, and missile segment needs. Its clients include ISRO, DRDO, NPCIL, HAL, and Bharat Dynamics.

Wipro has signed an agreement to invest $1.45 billion to acquire Capco, a global technology consultant providing digital, consulting, and technology services to financial institutions globally. This deal will make Wipro one of the largest end-to-end global consulting service providers to the BFSI space. The idea is to combine Wipro’s capabilities in strategic design, digital transformation, cloud, and cybersecurity with Capco’s domain and consulting strength. It also brings in a long list of marquee clients of Capco from the global BFSI space. In addition, Capco also services clients in the energy and commodities trading sector, which will be an added advantage for Wipro. This is part of Wipro’s larger inorganic strategy to once again regain leadership in the IT space. The deal is subject to regulatory approvals and will close by Jun-2021.

Gold that is held by ETFs or exchange-traded funds is normally considered to be hot money holdings of gold. That was evident this week after it became evident that the quantum of gold held by ETFs had fallen by 84.7 tonnes worth $4.6 billion in February. According to the World Gold Council, rising bond yields had reduced interest in gold as an asset class and also raised the opportunity cost of holding gold. The COVID pandemic had led to a surge in demand for gold as a safe haven which had led to gold prices in the global spot market scaling $2,072/oz in Aug-20. ETF gold holdings had fallen to 3,681 tons worth $207 billion.

Plans for a steel plant in Odisha plan are back after the POSCO plan was shelved last year. An MOU was signed between the Government of Odisha and ArcelorMittal Nippon Steel for a green-field 12 MT integrated steel plant in the Kendrapara district of Odisha. This will entail an investment of Rs. 50,000 crores. Naveen Patnaik signed the deal with L N Mittal of Arcelor Mittal. Dharmendra Pradhan had said earlier that Odisha would be made a nerve center for the Indian steel sector. Massive investments in steel will spur the infrastructure boost in the economy which is a pre-requisite to push Indian GDP to $5 trillion.

Flipkart, now owned by Wal-Mart, may look to go public in the US through a merger with a US company to quicken its listing process. While a US IPO and listing were on the cards, Flipkart is also mulling other options now. According to informal estimates, Flipkart could seek a valuation of $35 billion or more in a blank-check transaction. If that happens, Flipkart could join the list of other companies like ReNew Power and even Grofers who are looking at a blank check transaction to list their companies in the US. It is estimated that as many as 10 Indian companies could go public through such blank check deals in the US.

On a day when the overall markets were subdued, cement shares attracted a lot of buying interest. Stocks like UltraTech, Ambuja, and Ramco Cement touched 52-week highs on reports of a spurt in demand. Other cement companies like Orient Cements and India Cements also scaled yearly highs. Most of the leading cement companies including ACC, UltraTech, and Shree were all up between 3% to 5% on Thursday. Most cement companies have seen price hikes of Rs.20-30/bag in March in the South and Eastern region and a smaller spike in other regions. The price hike should be able to absorb the spike in inputs like pet coke, coal, and diesel which are all up sharply in the recent past. The volumes in the Mar-21 quarter are expected to grow 20% YoY. Apart from infrastructure, a pick-up in real estate activity also boosts cement demand.

World Market Indices at 10am

12 2 Daily Market Update MAR 5

 

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