Joseph Thomas, Head of Research, Emkay Wealth Management:
The equity markets trended higher for major part of the week, barring a flattish closing on the last trading session of the week. The market strength was well supported by IT, Metal and Pharma stocks. The healthy set of earning numbers from IT majors buoyed sentiments. Even as the FIIs remained net sellers, the markets received support from DIIs.
Overall the sentiment is positive as there has been a robust start to the earnings season by the IT companies. For the coming week as well the focus would remain on earnings and this factor may dictate the market direction. On the global front the factors to monitor would be macro-economic data coming out of US, such as Housing Starts and Jobless claims.
Tatva Chintan Pharma Chem IPO updates
Tatva Chintan Pharma Chem's initial public offering saw strong demand, as the IPO was fully subscribed in the initial hour of bidding on the first day itself. Another big-bang opening for an IPO this week as Zomato's public offer, too, draws an enthusiastic response.
The offer was subscribed 4.36 times on July 16 so far, as investors put in bids for 1.42 crore equity shares against the IPO size of 32.61 lakh equity shares, data available on the exchanges showed.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:
The last two weeks have seen volatility compress in USD-INR. In fact, the intra-week price range in USD-INR was lowest since early August 2020. On one hand, RBI was rumored to have been buying quite aggressively under 74.50 on spot but on the other hand, record FPI flows in the Zomato IPO and FDI inflows did not let USD-INR move above 74.65 levels.
Volatility expansion is natural once USD-INR gets coiled in a low volatile range for some time. With the FPIs shying away from the secondary market and IPO season entering a lull, USDINR may converge to a higher US Dollar Index. A Bit of risk-off is needed in equity markets to trigger a move towards 75.00 levels in the coming days.
KR Choksey on the cement sector:
Cement demand got impacted during April-May 2021 period, due to business restriction imposed by several states in the wake of second wave of Covid. However, sustained demand from infrastructure sector and continued production unlike last year have helped the cement companies to report strong YoY growth in cement volumes. We are bullish on the cement sector due to strong demand environment, which will drive future earnings of the cement companies. Our top pick in the sector include UltraTech Cement.
Ajit Mishra, VP - Research, Religare Broking:
Market traded lacklustre and ended almost unchanged, taking a breather after the recent up move. The benchmark opened marginally in the green however profit booking in heavyweights from the banking and IT pack dragged the indices lower. However, buying in pharma, realty and metal majors helped the index to pare the intraday losses and end flat. Eventually, the Nifty closed at 15,923 levels. Meanwhile, the outperformance continued from the broader indices which kept the traders busy.
We reiterate our positive yet cautious stance on the market and suggest using dips to add quality stocks. In absence of any major event, we suggest keeping a close watch on earnings and performance of the global markets for cues.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
: It appears to be the day of consolidation on the bourses as Nifty remained in a narrow range of 80 points by depicting a Hanging Man kind of candle where as a small bullish candle with 318 point range is registered on the Weekly charts. Despite this kind of lacklustre move it still looks advantageous to the bulls at this point in time as Nifty managed to sustain above 15900 levels where as current breakout can be deemed to fail if Nifty closes below 15850 levels. In that scenario again the indices may slip into consolidation phase with negative bias.
Contrary to this sustaining above 15900 levels a higher target into the zone of 16200 – 300 can be expected. Though price chart is bullishly biased technical oscillator/indicator set up has not yet improved in favor of bulls. Hence, index traders are advised to remain cautiously optimistic by maintaining a stop below 15850 levels.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research:
The market witnessed some lackluster movement and an attempt to hold the support level around the Nifty 50 Index level of 15900 While sustaining above 15900 is the key factor from a short-term perspective, maintaining above this level is important for the market to gain momentum and extend the rally until 16200. The momentum indicators like RSI and MACD to stay positive and market breadth to improve, further strengthening a short-term bullish outlook.
Jateen Trivedi, Senior Research Analyst at LKP Securities:
Rupee traded in a narrow range between 74.50-74.60 on back of inline import/export trade balance numbers, also sideways trade in dollar index prices near $92.55 due to US jobless data were inline on expectations kept both dollar & rupee in range. Going ahead range for rupee can be seen between 74.45-74.75 in sessions ahead.
Aurobindo Pharma shareholding pattern
LIC raises stake to 3.46 percent in Q1 FY22 from 1.91 percent in Q4 FY21.
Ashis Biswas, Head of Technical Research, CapitalVia Global Research
The market witnessed some lackluster movement and an attempt to hold the support level around 15,900. Sustaining above 15,900 is the key factor to gain momentum and extend the rally to 16,200.
Closing update:
Market benchmarks the Sensex and the Nifty ended flat after a choppy trade. Sensex closed 19 points, or 0.04 percent, lower at 53,140.06 while the Nifty finished flat at 15,923.40.
BSE Midcap and samallcap indices closed 0.45 percent and 0.38 percent higher, respectively.
Among the sectors, Nifty Pharma, realty and metal indices rose over a percent each while Nifty IT fell over a percent.
Nearly 500 stocks hit their upper circuits:
Nearly 500 stocks, including Angel Broking, Bafna Pharmaceuticals, Kanpur Plastipack, Goodluck India, Capital Trust, 5paisa Capital, Parsvnath Developers and Infomedia Press, hit their upper circuits in intraday trade on BSE.
Nearly 500 stocks hit fresh 52-week highs:
Nearly 500 stocks, including Tata Steel, UltraTech Cement, Abbott India, ACC, Alkem Laboratories, Ambuja Cements, Balkrishna Industries, Cyient, Divi's Labs, Dixon Technologies, DLF, Glenmark Pharmaceuticals, Godrej Properties, Indiabulls Real Estate, Mindtree and Wipro, hit their 52-week highs in intraday trade on BSE.
Nifty Pharma index rises over a percent
Fitch affirms Indian Oil Corporation at 'BBB-'; outlook negative
Fitch Ratings has affirmed Indian Oil Corporation Ltd's (IOC) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-'. The Outlook is Negative. The agency has also affirmed IOC's senior unsecured rating and the ratings on its outstanding senior unsecured debt at 'BBB-'.
Tapan Patel, Senior Analyst (Commodities) at HDFC Securities
: Crude oil prices traded marginal up with benchmark NYMEX WTI crude oil prices were trading 0.32% to $71.88 per barrel for the day. MCX Crude oil July futures were down by 0.41% to Rs 5,359 by noon.
Crude oil prices are expected to trade sideways to down for the day with resistance at $73 and support at $70 per barrel. MCX Crude oil July has support at Rs 5,280 and resistance at Rs 5,420.
HDFC AMC Q1:
Net profit grew 9.3 percent at Rs 345.4 crore against Rs 316.1 crore (QoQ). Revenue was up 0.8 percent at Rs 507.1 crore against Rs 503 crore (QoQ). EBITDA was down 3.9 percent at Rs 381 crore against Rs 396.3 crore (QoQ). EBITDA margin at 75.1 percent against 78.8 percent (QoQ).
Tatva Chintan Pharma Chem IPO shares trade at 60% premium in grey market
Specialty chemical company Tatva Chintan Pharma Chem IPO shares seem to be getting strong demand in the grey market as their premium jumped to around 60 percent over its higher end of price band. Healthy financials, niche global player in speciality chemicals with SDAs in centre stage, and discounted valuation compared to its peers are some of reasons for strong demand, experts feel.
Shares were available at a premium of Rs 620-690 in the grey market, the IPO Central and IPO Watch data showed. That resulted into a price of Rs 1,703-1,773 per share, a premium of 57.2-63.7 percent over higher issue price of Rs 1,083.
European markets are trading mixed with FTSE and DAX trading marginally in the green
RIL's clean energy investment may create $36 billion business in five years: Report
Reliance Industries's (RIL) Rs 75,000 crore planned investment in clean energy could create a business worth $36 billion, according to Bernstein.
The investment will be value-accretive and create a new energy business valued at Rs 395 per share by 2026, according to a Bloomberg story citing the Bernstein report.
Based on the Rs 60,000 crore capex, Bernstein estimates that the business will contribute almost 10 percent to RIL's total operating income by FY26, the report said. Read more
Market update at 2 PM: Sensex is down 131.79 points or 0.25% at 53027.06, and the Nifty shed 32.70 points or 0.21% at 15891.50. Bharti Airtel is the top gainer while HCL Tech and Eicher Motors are the top losers.
Among the sectors, metals and realty stocks edged higher while IT and PSU banks are under pressure.
Emkay Global on Bandhan Bank
Bandhan Bank's AUM grew at a lower-than-expected rate of 8 percent YoY (down 8 percent QoQ). We believe that this could be primarily due to lower disbursements in the MFI and small business loan segment on account of Covid-led disruptions in Eastern India, which is still reeling under extended lockdowns. Ujjivan, a relatively close peer, has also reported 2 percent YoY/7 percent QoQ decline in AUM, while the impact on growth was relatively moderate for Equitas SFB, with its AUM up 15 percent YoY/down 0.5 percent QoQ on lower dependence on the MFI book.
Notwithstanding near-term asset-quality risk, we have a buy rating (target: Rs 390) on the stock, given its strategy of diversifying asset portfolio away from MFI in terms of both products and geography, enviable liability profile, superior return ratios (RoA/RoE of 2.5-3.4 percent/17-25 percent over FY22-24E) and reasonable valuations (2.2x FY23E ABV/1.7x FY24E ABV).
Shankar Sharma, Co-Founder and Vice-Chairman, First Global:
The retail frenzy with respect to Zomato IPO is that it has touched people’s lives – so there is familiarity with the name and to that extent people want to participate. How will that work out will be very interesting question.
Zomato is a concept stock because it is still a loss making company. Indian market typically is stringent about profitability and India does not have a great history of rewarding companies which make losses.
Likhita Chepa, Senior Research Analyst, CapitalVia Global Research
: Indian equity indices started the day slightly higher, despite mixed signals from Asian rivals. Traders were encouraged by the Reserve Bank of India's (RBI) report that the second wave's tapering, along with an active vaccination campaign, has brightened the Indian economy's near-term prospects, with the Indian economy growing 22.1 percent in the April-June quarter.
We witnessed some lackluster movement in the market and an attempt to hold the support level around the Nifty 50 Index level of 15,900. While sustaining above 15900 is the key factor from a short-term perspective, our research suggests maintaining above this level is important for the market to gain momentum and extend the rally until 16200.
Market update at 1 PM: Sensex is down 46.39 points or 0.09% at 53112.46, and the Nifty shed 9.70 points or 0.06% at 15914.50. Bharti Airtrel and Divis Labs are the top gainers.
On the sectoral front, the pharma and realty index added a percent each while IT and PSU Bank index are under pressure.
Northern Arc Capital files DRHP to raise funds via IPO
Northern Arc Capital, a platform in the financial services sector, has filed its draft red herring prospectus (DRHP) with the capital markets regulator Sebi, to raise funds via initial public offering. The IPO comprises a fresh issue of Rs 300 crore and an offer for sale of up to 3,65,20,585 equity shares by existing selling shareholders.
The offer for sale comprises a selling of 89,87,093 equity shares by Leapfrog Financial Inclusion India (II), 23,10,191 equity shares by Accion Africa-Asia Investment Company, 70,76,499 equity shares by Augusta Investments II PTE. Ltd, 40,83,812 equity shares by Eight Roads Investments Mauritius II, 38,64,160 equity shares by Dvara Trust, 50,41,455 equity shares by IIFL Special Opportunities Fund, 12,31,710 equity shares by IIFL Special Opportunities Fund – Series 2, 5,41,805 equity shares by IIFL Special Opportunities Fund – Series 3, 18,62,128 equity shares by IIFL Special Opportunities Fund – Series 4, and 15,21,732 equity shares by IIFL Special Opportunities Fund – Series 5.
SpiceJet chairman Ajay Singh readying $1-billion bid for Air India: Report
SpiceJet Chairman and Managing Director Ajay Singh, along with two US based funds, is keen to bid $1 billion through a Special Purpose Vehicle (SPV) in the beleaguered Air India, a report in The Economic Times said.
Citing people aware of the matter, the publication said that the SpiceJet promoter will raise $300 million by offloading his stake in SpiceJet’s cargo unit through the offer for sale route once the unit is listed. Singh has nearly 60 percent stake in SpiceJet however about one-third of it is encumbered.
Singh is expected to maintain a 26 percent stake in the SPV. The remaining $700 million will be contributed by the two based funds. The report added that these plans are “fluid” and the final plans may be “tweaked".
Chief
Economic Adviser, Krishnamurthy Subramanian: Several high frequency indicators looking up since May. Expect the impact of the second wave to be not very large. Growth estimates for this year unlikely to be impacted much. Productivity should go up with asset monetisation and privatisation. Expect investment rate to ramp up significantly. Expect growth to start hitting 6.5-7 percent levels FY23 onwards, according to a CNBC-TV18 report.JMC Projects bags orders worth Rs 1,624 crore
JMC Projects (India) Limited has secured new orders of Rs 1,624 crore (Received orders of Rs 496 crore in Q1 FY22 and Rs 1,128 crore in Q2 FY22 till date). The orders include road project in Ghana of Rs 1,128 crores and building projects in India of Rs 496 crore.The stock was trading at Rs 123.55, up Rs 3.85, or 3.22 percent. It has touched an intraday high of Rs 127.00 and an intraday low of Rs 119.30.
Zomato IPO: Big market names that are not convinced by the euphoria
The Zomato initial public offering (IPO) was subscribed 5.25 times until 10.45 am on July 16 – the third and last day of bidding. The offer had received bids for 377.27 crore equity shares against IPO size of 71.92 crore equity shares, the subscription data available on the exchanges showed. Retail investors were at the forefront as the portion reserved for them had been subscribed 5.18 times, while non-institutional investors had placed bids for 63 percent against their reserved portion.
While the excitement among investor community has been thrilling, many experts have said that the valuations of the issue are on the higher side.
Nithin Kamath, the Founder and CEO of Zerodha, had tweeted on July 12 that the risk with all high growth B2C tech IPOs coming up “is growth plateauing”. "Growth is usually a function of agility and product bets. Since these companies take more bets and are more agile and aggressive than traditional businesses, they grow faster," Kamath said.
Market update at 12 PM
Sensex is down 50.53 points or 0.10% at 53108.32, and the Nifty shed 13.30 points or 0.08% at 15910.90. Bharti Airtel, Divis Labs and UltraTech Cement are the top gainers while IT names are under pressure.
Among the sectors, the IT and banking index are trading in the red while pharma stocks have edged higher.
The IT index shed over a percent dragged by Tata Elxsi, HCL Tech and Vakrangee
Tatva Chintan Pharma Chem IPO fully subscribed within first hour of bidding on Day 1
Tatva Chintan Pharma Chem's initial public offering saw strong demand, as the IPO was fully subscribed in the initial hour of bidding on the first day itself. Another big-bang opening for an IPO this week as Zomato's public offer, too, draws an enthusiastic response.
The offer was subscribed 1.06 times on the morning of July 16 as investors put in bids for 34.59 lakh equity shares against the IPO size of 32.61 lakh equity shares, data available on the exchanges showed.
The demand from retail investors remained strong for the specialty chemical company, as their reserved portion was subscribed 2.1 times.
ngel Broking shares surge 13%, hits record high after robust Q1 show
A: Angel Broking share price hit record high on July 16, surging over 13 percent intraday after the company declared its Q1 numbers. ngel Broking reported 19 percent increase in consolidated net profit to Rs 121.37 crore in Q1 FY22 over Q4 FY21. he stock broker's consolidated net profit jumped 156.6 percent while revenue from operations jumped 94 percent in Q1 FY22 over Q1 FY21. Total income stood at Rs 474.5 crore in Q1 FY22 as against Rs 418.9 crore in Q4 FY21, a growth of 13 percent QoQ. The board, in its meeting held on July 15 also approved the change of name of the company from 'Angel Broking Limited' to 'Angel One Limited' or Angel One Fintech Limited' or any other name as may be approved by the Central Registration Center of Ministry of Corporate Affairs.
Market update at 11 AM:
Sensex is up 10.42 points or 0.02% at 53169.27, and the Nifty added 5.80 points or 0.04% at 15930. Bharti Airtel, ITC and Sun Pharma are the top gainers while Wipro, Happiest Minds and HDFC AMC are the most active stocks.
Among the sectors, the healthcare index added a percent while IT and realty stocks are under pressure.
Paytm files DRHP for Rs 16,600 crore IPO:
One97 Communications, the parent company of fintech platform Paytm, has filed its draft documents to raise Rs 16,600 crore via a public offering, the latest among a slew of internet companies that are listing on the Indian stock exchanges.
This will also be India's biggest public issue so far, a record that was previously held by Coal India, which raised Rs 15,000 crore over a decade ago, underscoring the appetite for new-age internet companies among institutional investors.
Nifty Pharma added over a percent led by Alkem Labs, Divis Labs, Sun Pharma and Cipla
Motilal Oswal on Tatva Chintan Pharma Chemicals IPO
: We like TCPCL due its leadership position, wide product portfolio, strong client relationship and high entry barriers. The company is expected to witness strong growth for next 2-3 years given its expansion plans. It is well placed to tap opportunity in the fast growing specialty chemical space with increasing focus on green chemistry by leveraging its strong R&D capabilities.
The issue is valued at 45.9x FY21 P/E on post issue basis, which appears reasonable compared to peers (avg. P/E of 59x), as it enjoys higher earnings growth (62% CAGR against average 38 percent CAGR for peers over FY18-21). Hence, we recommend subscribe.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
: Nifty continues to trade well above the 15,915 levels. We should be headed to 16,100 as the next target before reviewing a further course of action. A good support and stop lies below 15,700 and until that does not break on a closing basis, traders can accumulate long positions on intraday dips.
Zomato IPO updates
The initial public offering of Zomato, one of the leading food service platforms in India, subscribed 4.82 times so far on July 16, the third day of bidding. The offer has received bids for 346.56 crore equity shares against IPO size of 71.92 crore equity shares, the subscription data available on the exchanges showed.
The retail investors are at the forefront as the portion reserved for them is subscribed 4.82 times, while non-institutional investors have put in bids for 47 percent against their reserved portion. The portion set aside for employees is subscribed 37 percent and that of qualified institutional buyers subscribed 7.07 times.
Rupee opens
Rupee opens at 74.54 per US dollar, unchanged against July 15 close.
Market update at 10 AM
Sensex is up 34.50 points or 0.06% at 53193.35, and the Nifty added 15.30 points or 0.10% at 15939.50. Sun Pharma, ITC, Bharti Airtel and Tata Motors are the top gainers while Wipro, Happiest Minds and Tata Motors are the most active stocks.
Among the sectors, the pharma index gained over a percent while the midcap and smallcap indices are also trading in the green.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
: The ongoing global bull run, which has baffled even the best of experts, is unique. The unprecedented huge liquidity created by the leading central banks and the undue influence being exerted on the market by the exploding number of newbie retail investors has rendered traditional market valuation models less significant than during normal times. But the principles of economics, finance & markets will exert themselves strongly when normalcy returns.
Since we don't know when this is going to happen, the party is going on. While enjoying the party, investors should also apply restraint. Don't chase mid-small-caps that are in bubble territory. While Nifty is up 13.89 percent YTD, the midcap and smallcap indices are up 33.16 percent and 45.79 percent YTD respectively. Hyper retail enthusiasm and very low institutional activity in this segment are causing this irrational exuberance. History tells us that this will not last. Largecaps though overvalued are relatively safe.
Bandhan Bank shares slip after loan book, deposits fall in Q1
Bandhan Bank share price shed over 2 percent after the bank's loan book and deposits declined in June quarter. The Kolkata-based bank on July 15 said its loans and deposits have declined on a quarter-on-quarter (QoQ) basis in a business update to the stock exchanges. Total loans and advances shrunk by 8 percent in June quarter to Rs 80,128 crore compared with Rs 87,043 crore in the March quarter. Total deposits contracted by one percent on a QoQ basis to Rs 77,336 crore from Rs 77,972 crore, the bank said.
United Spirits witnesses large trade on NSE, BSE
United Spirits stock has witnessed large trade of 1.2 crore shares (1.65 percent equity) in multiple blocks on BSE and NSE at an average price of Rs 637 per share.
