Weekly Capsule (Mar15–Mar19)

weekly 4 Weekly Capsule (Mar15–Mar19)

News AnnouncementImpact Analysis
·        Stock markets snapped a 5-day losing stream by gaining sharply on Friday·        After the Sensex lost 2063 points for 5 days till Thursday, it was a weak start on Friday but jumped 1700 points from lows

·        Apart from the rising bond yields in the US, the markets were also worried about the consistently rising COVID cases

·        10-year bond yields in India touch the highest level for FY21 at 6.18%·        The rise in bond yields has been in tune with the US where 10-year bond yields rose from 0.51% to 1.74%

·        One factor that has also driven Indian bond yields higher is the steep fiscal deficit pegged at 9.5% of GDP for FY21

·        Zomato to file for $650 million IPO in the month of April 2021·        This will be the largest IPO by an eCommerce company in the Indian IPO market to date

·        Zomato, which competes with Swiggy in India, plans to list the company before the end of September 2021

·        Nazara Technologies IPO subscribed 175 times on the last day·        Nazara is an offer for sale with just 10% allocation for retail and 75% allocation for qualified institutional buyers

·        The company had a lot of heft in the market as it is backed by a star Indian investor, Rakesh Jhunjhunwala

·        SEBI perpetual bonds circular spooks bond markets during the week·        There was a virtual sell-off in AT-1 and Tier-2 bonds ahead of the implementation of the SEBI rules for perpetual bonds

·        SEBI had insisted that mutual fund should provide for it as 100-year bonds which would have led to a spike in provisioning

·        Manappuram Finance plans to raise Rs.6,000 crore of funds in FY22·        The gold loan business has been under some kind of pressure due to the sharp fall in gold prices since August last year

·        With just two major NBFC players in the organized gold lending segment, Manappuram wants to prepare a war-chest

·        Defence Ministry signs Rs.1,188 crore deal with Bharat Dynamics Ltd·        The deal with BDL will be for the supply of 4,690 anti-tank guided missiles with a range of 1850 KM

·        The order is part of the Atma Nirbhar plan which entails farming out most defense orders internally

·        FOMC meet on 17 March holds status quo on interest rates·        The decision to maintain rates at 0.00%-0.25% is likely to continue all the way to the end of the year 2023

·        The Fed has also underlined that it would only react if average inflation in the US stayed above 2% for a sustained period

·        FOMC avoids talk on the taper and commits to $120 billion of bond-buying·        The Fed would continue to buy $80 bn of G-secs and $40 bn of agency-backed securities monthly to keep the markets liquid

·        The Fed has also specifically assured that it was not rigid on numbers and willing to enhance this limit if necessary

·        Government of India entirely exits Tata Communications stake in FY21·        GOI had sold most of its stake in Tata Communications via the OFS which was opened and fully subscribed during the week

·        Under the terms of the deal, the balance of 10% left with the GOI was directly sold to Tata Sons investment arm, Panatone

·        Aarti Drugs rallies after setting buyback price at Rs.1000·        The buyback price has been fixed at Rs.1000 per share, which is at a 46% premium to the last closing price of the stock

·        The company has already fixed 01 April as the record date to ascertain shareholders eligible to participate in the buyback

·        Bajaj Auto announces elaborate dividend policy for its shares·        The new dividend policy is intended to substantially increase the dividend pay-out to shareholders by almost 45%

·        The move is expected to enhance the ROI of the company as the profits will be spread across a smaller balance sheet

·        Delhi High Court penalizes Biyanis for not adhering to SIAC diktat·        While the penalty at Rs.2 million may be small, it virtually closes the doors for any merger action before the verdict

·        Amazon, which holds a 49% stake in Future Coupons, had objected to not being given the first right of refusal

·        Multiplex companies, PVR and INOX, come under pressure during the week·        This was after the Maharashtra government imposed more stringent lockdown norms due to rising COVID cases

·        Both the multiplex companies have already taken a huge hit on their profits on account of prolonged shutdowns

·        UBS upgrades Tata Steel and JSW Steel among Indian steel stocks·        Steel has been upgraded on strong demand in user segments like construction, heavy equipment, and automobiles

·        Despite the 200% rally in these stocks, both are way below median valuations sustained by them in the past

·        Piramal Enterprises to raise Rs.3000 crore to fund its DHFL acquisition·        PEL emerged as the highest bidder for DHFL beating Oaktree Capital and Adani Enterprise in the race

·        For the Piramal group, the acquisition helps diversify their builder financing book and offers a ready customer base

·        Birla AMC may be planning an Initial Public Offer in the near future·        It will be the fourth Asset Management Company after Nippon, HDFC, and UTI to list on the stock exchanges

·        With a strong equity focus and being the fourth largest in terms of AUM, the AMC should get above par valuations

·        Hurun Survey hints at expansion in the million-dollar club and in super HNIs·        What is more interesting is that the wealthy people surveyed plan to enhance allocation to equity and reduce real estate

·        In terms of credit card preferences, AMEX continued to be the top preference followed by HDFC Bank and Citibank

·        India likely to cut down on oil imports from Saudi Arabia by nearly 25%·        Apparently, India has not been happy about OPEC refusing to consider India’s please to increase supply and check prices

·        Higher oil prices pose a major challenge for India as imports still account for 80% of the daily oil consumption in India

·        Vedanta may delist the Indian unit by offering a buyback price of Rs.235·        This is nearly 2.7 times the original price offered last year when the complete buyback did not go through

·        Also, the buyback is likely to take the debt of Vedanta PLC to $8.2 billion and hence an exit may be a good idea

·        Gland Pharma rallies sharply on Sputnik-V COVID vaccination order·        Gland Pharma will manufacture and supply 25.2 crore doses of the anti-COVID Sputnik-V vaccine on behalf of RDIF

·        Apart from Gland Pharma; Reddy Laboratories and Hetero Drugs are also closely involved with the Sputnik-V project

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