Dear Reader,
The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.
It’s raining offers this month and not just for COVID-weary shoppers. This week alone has four book-building issues, three fixed price issues and one offer for sale (OFS) visible on the BSE website. The odds also are in favour of the issues doing well, with the BSE showing that every two of three IPOs that opened in 2021 have gained over their listing price so far. Such statistics is of little use to retail investors, especially those who may have invested in the third that have not done well so far.
In today’s edition, we have analysed two issues, both South-based and with most of the money being raised going to existing shareholders who are paring their stake. One view can be that retail shareholders are giving a partial exit to promoters or institutional investors. But another view is that this may mean the companies don’t require capital for growth and there is low dilution of existing equity capital. The continued presence of institutional shareholders could also be a source of comfort, although there is a risk that they may sell down more of their stake in future.
While these are extraneous factors, what really matters for investors is whether the fundamentals of both companies are sound and whether the offer price is attractive. KIMS is a South-based hospital chain with 2,500 operational beds and growing and while COVID has brought its share of challenges, it’s managed to cope well and lowered its debt too. Here’s our research team’s take on the issue. And, do also read our team’s take on the Dodla Dairy issue. Investors have burnt their fingers in some dairy stocks in recent years and it remains to be seen if this issue restores some of their faith.
The issuers and their bankers will be hoping that the markets stay on their side. This week has seen stock markets sport a slightly damp look and today too, the broad market is weak. But the mood among global investors is cheery, as seen in today’s chart of the day, the Bank of America survey of fund managers found that investors are piling into commodities although equities remain the most favoured asset class.
All eyes will be on the Federal Reserve’s statement later tonight. Will the Fed projections signal they expect inflation to settle at higher levels in the next few years? And if they do, then will they walk back from their stated position of holding interest rates at these levels till 2023 at least? While they may not go as far as to say that, even a slight acknowledgement of concern about rising prices could send shivers down the market’s spine. To be better prepared, do read from the FT: Watch the ‘dot plot’ at the Fed meeting (free for Pro subscribers).
Here are more investing insights from our research team:
Industry tailwinds to drive Radico Khaitan’s earnings growth
Jubilant FoodWorks: Well placed to capture the growth opportunities
What else are we reading today?
RBI MFI regulations good on intent, but might be difficult to implement
It isn't crude oil but edible oil that is giving the government a headache
B3W vs BRI — World leaders have a B in their bonnets
EV industry has got higher sops from FAME II, now it’s time to crank up the numbers
Explained: How SEBI arrived at all the penalties in the Franklin Templeton case
Technical picks: DLF, Axis Bank, M&M Finance and Power Grid Corporation of India (These are published every trading day before markets open and can be read on the app)
Ravi Ananthanarayanan
Moneycontrol Pro
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