Market Walk

Top Market Highlights Of The Day – Nov 18th 2021

UBS revises Indias GDP growth forecast to 9.5% from 8.9% for FY22

Global brokerage house, UBS, has revised India’s GDP growth for FY22 from 8.9% to 9.5%. UBS has cited faster-than-expected recovery, rising consumer confidence and the spending spike as key reasons for the upgrade. It estimates GDP growth at 7.7% for FY23 and at 6% for FY24. However, UBS sees the RBI hiking repo rates by 50 bps in FY23. GDP growth in the Jun-21 quarter was 20.1% while the GDP figure for Sep-21 quarter will be announced on 30-November. UBS India Activity Indicator showed 16.8% spike in Q2.

QSR chain, McDonald’s India, partnered with ITC

QSR chain, McDonald’s India, partnered with ITC to introduce fruit beverage, B-Natural into its new Happy Meal. This is available across West and South India. McDonalds completes 25 years in India. The idea is to make the food more wholesome and nutritious. The ITC fruit juice is considered to be a rich source of Vitamin-A and Vitamin-C. For ITC, this provides the much needed boost to make a mark in the FMCG segment with valuations consistently lagging that of HUL. McDonalds has reduced sodium content by 20%.

Vedanta sets up panel to recast firm, unlock value

Vedanta is exploring restructuring of the company, which could include demerger and listing of the aluminium, steel, copper and oil & gas businesses as standalone entities. Considering the recent spike in commodity prices, Vedanta believes that a standalone structure would result in better SOTP valuations. Once the restructuring is completed, the shareholders of Vedanta will automatically be allotted shares of all the individual companies. This is similar to the splitting exercise that Adani Group undertook in 2015.

Govt aims to privatise 5-6 PSUs in FY22

Government plans to invite financial bids for privatisation of 5-6 public sector undertakings between December 2021 and January 2022. DIPAM is keen to close all these transactions in the current fiscal year itself. This will be the first such privatization after a gap of nearly 19 years. The five PSUs that DIPAM is looking to privatize are BEML, Shipping Corporation of India, Pawan Hans, Central Electronics and Nilachal Ispat. This will be separate from the proposed privatization of BPCL, which is undergoing due diligence.

The Maruti stock surged 4% on Wednesday

The Maruti stock surged 4% on Wednesday and has gained 11% in the last 2 days, despite weak markets overall. The rally started after Maruti got state government approval for setting up a third passenger vehicle manufacturing plant in Haryana. The stock is now trading very close to its 52-week high price. In the month of Oct-21, Maruti posted total sales of 138,335 units, largely driven by record exports. Overall numbers were impacted by the microchip shortage. Maruti plans to launch new products to fill the gaps.

GoKwik Raises Rs 112 Crore Funding Round From Sequoia Capital

GoKwik, an ecommerce enablement company, raised Rs.112 crore funding, led by Sequoia Capital. This Series-A round funding also saw Matrix Partners India and RTP Global participate. GoKwik will use these funds to collaborate with large marketplaces and rapidly scale up the product and technology teams. In Sep-21, GoKwik raised Rs.40 crore from Matrix. Its clients include Good Glamm group, LimeRoad, EyeMyEye, Boat, OZiva, VMart etc. India’s e-retail market is expected to touch $120 billion in five years.

Airlines are rewriting the rules on frequent-flier programs

Airlines may be gradually transforming their frequent flier programs to frequent spender programs. In short, airlines are increasingly rewarding spending over mere flying and American Airlines is at the lead of this trend. Most other airlines, including Indian airlines, are expected to follow this model. American Airlines wants to re-define loyalty in terms of spending rather than in terms of flying. This is likely to be antithetical to the frequent fliers who rely on cheap tickets, but more spending looks the future model.

Mahindra Finance launches vehicle subscription business, Quiklyz

M&M Financial launched its leasing and subscription business Quiklyz. This is a digital platform for vehicle leasing and subscription, wherein you can use a car without really owning one. It thus becomes convenient and economical. Quiklyz will allow customers to access brand-new cars without hassles of car ownership. To begin with, Quiklyz will launch its services in Bengaluru, Chennai, Delhi, NCR, Hyderabad, Mumbai, and Pune. Eventually it will also 30 Tier-2 cities. Quiklyz will be available for corporate and retail customers.

Zomato may invest $500 million in Grofers

Last week, while announcing Zomato’s quarterly results, Goyal said in a blogpost, “Within all the businesses that we are looking at today, quick commerce (delivery of products in less than 30 minutes) is clearly emerging as one of the most promising ones. While we decided to not build quick commerce on our platform, we are excited about the progress our partner company, Grofers, has made in the 10-minute delivery space. We are likely to invest more in this space in the near term…”

Paytm listing

One97 Communications, the parent company of Paytm, could see a tepid stock market debut on Thursday if the unofficial grey market prices are to go by. Shares of the fintech company, which recently concluded the country’s largest-ever initial public offering, on Wednesday traded below the issue price of ₹2,150 a piece in the grey market, suggesting investor appetite has dimmed before the listing.

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