Previous Day Market
SENSEX closed at 48,732.55 up by 41.75 points
Nifty closed at 14,677.80 down by 18.70 points
For the week ended 14 May, 8 out of the top-10 highest market cap companies on the Nifty lost value to the tune of Rs.113,075 crore. TCS, Infosys, and HDFC Bank were among the worst affected. During the week TCS lost Rs.30,055 crore, Infosys Rs.15,168 crore and HDFC Bank lost Rs.15,139 crore in the week. In addition, HDFC Rs.13,430 crore, Bajaj Finance Rs.9,845 crore and HUL Rs.8,505 crore were key losers. RIL added Rs.3,519 crore market value during the week while SBI added a subdued Rs.2,053 crore in value.
FPIs pulled out Rs.6,452 crore in the first two weeks of May from Indian markets. Effectively, the FPIs pulled out Rs.6,427 crore from equities and a marginal amount of Rs.25 crore debt. At this rate, the FPI outflows look set to breach the April FPI outflow of Rs.9,453 crore. Experts attribute factors like muted earnings growth, the resurgence of COVID, delays in vaccinations, and lockdowns to the FPI selling. FPIs are turning to defensives like IT, Pharma, and FMCG and are downplaying banks, metals, and capital goods.
The GST Council is scheduled to meet after over 7 months on 28 May. This announcement was made by the finance minister, Nirmala Sitharaman. Key center-state disputes on GST sharing and passing on of state revenues will be taken up in the GST Council meet. The Council will also discuss the all-important issue of GST on petroleum, although no decision is expected on such a sensitive issue. The Council will also take up the reduction of GST on COVID inputs and vaccines. This will be the 43rd GST Council meeting.
Granules India earmarked a capital expenditure outlay of Rs.1,000 crore over the next three fiscal years for the expansion of its current operations. Granules will expand current production capacity and also invest in a new manufacturing unit. Rs.400 crores will be invested in FY22 while the balance of Rs.600 crore will be spread across FY23 and FY24. Granules will expand its API capacity as well the plants that roll out generic paracetamol and metformin. Granules expect 15-20% revenue growth in FY22 with net margins at 18%.
Gold imports in Apr-21 shot up to $6.3 billion due to a surge in domestic demand. This is a huge leap over gold imports of $2.83 billion in Apr-20, although that may not be exactly comparable due to the strain caused by the pandemic in 2020. Gold imports contributed to the spike in the merchandise trade deficit to $15.1 billion in Apr-21. However, silver imports dipped by 88.5% in Apr-21 to $11.9 million, a relatively insignificant sum compared to gold. The resurgence of COVID across India is likely to dampen gold demand.
Hero MotoCorp plans to launch an electric model in 2022, marking its entry into the EV segment. Hero Moto will be using R&D setups in Jaipur and in Germany to develop its own products. Hero has also tied up with Gogoro Inc or Taiwan to bring its battery swapping platform to India. Gogoro of Taiwan will also collaborate with Hero on EV development. Hero Moto has already invested in Bengaluru-based EV start-up, Ather Energy, for new models in the Indian market. The timeline for the actual EV launch is the year 2022.
Tata Digital, the digital arm of Tata Sons, proposes to raise a sum of Rs.5,000 crore via commercial paper to expand its e-commerce footprint. In fact, Tata Digital is the company that is creating the platform to channelize all of Tata group’s digital efforts under a single banner. The rates are likely to be fine as India Ratings has assigned “A1+” for the CP of Tata Digital. Tata Digital is directly owned by Tata Sons. Tata Digital had reported revenues of Rs.12.7 crore and an EBITDA loss of Rs.306 crore for FY21, which is quite normal.
Devyani International, which has the India franchisee for Pizza Hut, KFC, and Costa Coffee; has filed DRHP with SEBI for its proposed Rs.1,400 crore IPO. The issue will consist of Rs.400 crore by way of fresh issue and the balance Rs.1,000 crore via offer for sale in which some of the early investors will offload 12.5 crore shares in the IPO. Despite pandemic pressures, Devyani opened 109 stores in the last 6 months. Devyani is already the largest QSR company to be listed on Swiggy and Zomato in the years 2019 and also in 2020.
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