Global markets rallied in the week gone by after US President Joe Biden embraced a bipartisan Senate infrastructure deal raising hopes for an extended rebound in the world’s largest economy. Actually, Investors have been looking to an infrastructure agreement to extend the U.S. recovery after massive fiscal stimulus helped the U.S. economy grow at a 6.4% annualized rate in the first quarter. The plan is valued at $1.2 trillion over eight years, with a mix of new and repurposed funding. Investors also cheered data that showed a record peak for US factory activity in June. The prospects of an economic recovery in Japan is getting unclear as the number of new COVID-19 infections is on the rise again, and the pandemic could worsen as Japan is holding the Olympics. As per credit Suisse, the United States is set to grow at a rate of 6.9% this year, the Eurozone is expected to expand by 4.2% while Asia ex-Japan is predicted to grow 7.5%.
Back at home, domestic markets also rallied led by improved prospects of economic recovery in the backdrop of sharp contraction in daily caseload and ramp-up in vaccination programme. Also strong global factors pushed the markets higher. Amid buzz of a fresh stimulus, the government is set to scale up the Emergency Credit- Linked Guarantee Scheme to Rs 5 lakh crore, from the current Rs 3 lakh crore, while expanding its scope to include hospitals. In another development, data showed that business activities across sectors such as auto, consumer goods and electronics, smartphones, ecommerce, hospitality and real estate picked up in June over May, amid falling infections and gradual relaxation of Covid-induced restrictions in various parts of the country. Meanwhile, Global ratings agency S&P has lowered India’s GDP growth estimate to 9.5% in the current fiscal year from its earlier projection of 11%, citing the impact of the second wave of Covid. Going ahead, the update on the monsoon will also be closely watched by the investors. Besides, global cues, rupee movement along with the mood of foreign as well as domestic players and macroeconomic data will continue to dictate the trend of the stock market.
On the commodity markets front, CRB closed up marginally as market was eyeing on better outcome of PMI, Durable goods and other data. The U.S. dollar moved below an 11-week high versus major peers as traders navigated conflicting signals from Fed officials on the timing of a withdrawal of monetary stimulus. Demand for gold is "slowly coming back despite the Federal Reserve's "pivot over talking about removing stimulus, they are still probably years away from doing tightening. Energy counter may continue its recovery as vaccinations are rolled out worldwide, boosting fuel consumption and helping to drain stockpiles that were built up during the height of the pandemic. However, the upside should be capped now as OPEC may increase the production. The OPEC+ alliance is scheduled to meet at the end of the next week to discuss its production policy for August and some nations are considering backing an output increase. Inflation Rate YoY Prel, Unemployment Change and Unemployment Rate of Germany, Consumer Confidence, Markit Manufacturing PMI Final, ISM Manufacturing, Non Farm Payrolls and Unemployment Rate of US, NBS Manufacturing PMI of China, GDP Growth Rate of UK, Core Inflation Rate of Euro Area etc are many important triggers for commodities.
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SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.
With the focus on seizing opportunities, the company has geared up to service the rising steel demand in the market as soon as the gradual opening of lockdown started. It has always been SAIL's strategy to operate in sync with the market situation. The consistent growth reflects that SAIL is poised to grow steadily in future. The domestic steel consumption has a positive outlook as the economy is reviving and all sectors have started to pick-up. The management of the company is confident of seizing the unfolding opportunities in the steel market. Thus, it is expected that the stock will see a price target of Rs.161 in 8 to 10 months time frame on a current P/BV of 1.20x and FY22 BVPS of Rs.133.96.
The company has reported significant increase in Q4 2020-21 EBITDA at Rs.1754.83 crore as compared to negative EBITDA in Q4 2019-20 due to better oil price realization. Average crude oil price realisation during Q4 FY2020-21 was USD 59.80/bbl which was higher by 14.61% as compared to crude Oil price realisation of US$ 52.18/BBL during Q4 FY2019-20.
The company has built a strong financial position and used this to establish international presence in key hydrocarbon prolific areas as well as presence across the hydrocarbon value chain. It continues to be of strategic importance in the Indian energy sector as it plays a crucial role in the implementation of GoI policies in the oil & gas sector, with added presence across various segments in oil and gas sector. It is expected that the stock will see a price target of Rs.189 in 8 to 10 months time frame on a target P/BVx of 0.77x and FY22 BVPS of Rs.244.88.
The stock closed at Rs 122.70 on 25th June, 2021. It made a 52-week low at Rs. 60.35 on 02nd November, 2020 and a 52- week high of Rs. 124.80 on 11th May, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 93.37.
As we can see on charts that stock is trading in higher highs and higher lows sort of “Rising Wedge” on weekly charts which is bullish in nature. Last week, stock ended with 9% gains and has managed to close on verge of breakout of pattern along with high volumes so buying momentum may continue in coming days. Therefore, one can buy in the range of 119-120 levels for the upside target of 135-137 levels with SL below 112 levels.
The stock closed at Rs. 5545.35 on 25th June, 2021. It made a 52-week low of Rs 3955 on 30th June, 2020 and a 52-week high of Rs. 5900 on 10th Nov, 2020. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs. 4927.04.
Short term, medium term and long term bias look positive for the stock as it is continuously trading in uptrend since 31st October, 2019. On weekly charts, stock is forming an “Inverted Head and Shoulder” pattern, which is considered to be bullish. Last week, stock consolidated in narrow range along with positive bias with high volumes so further upside is expected from the stock in near term. Therefore, one can buy in the range of 5420-5460 levels for the upside target of 6000-6200 levels with SL below 5200 levels.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
SOURCE: RELIABLE SOFTWARE
Charts by Reliable software
Bulls made a strong comeback in Indian markets after June series expiry as Sensex hits all-time highs while Nifty indices remained just short of retesting it record highs. This time markets got support from banking counter along with IT and metal space. The Implied Volatility (IV) of calls closed at 13.73% while that for put options closed at 14.32%. The Nifty VIX for the week closed at 15.10% and is expected to remain volatile. PCR OI for the week closed at 1.42. From technical front, Bank Nifty is facing strong hurdle in zone of 35500-35700 levels above which we expect banking sector to gather some momentum in upcoming sessions. However, markets are likely to remain in its bullish territory as far nifty is holding well above 15500 levels on broader structure. We can expect some volatility in upcoming week as traders would look to book some profits at higher levels. Technically 16000 levels would act as a key psychological level for Nifty above which we could witness next round of buying momentum which could take markets towards 16250 levels as well.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric futures (July) will probably trade with an upside bias taking support near 7350 levels taking positive cues from the spot markets. Turmeric prices are gaining momentum in many mandis due to higher valuation of better quality of supplies. According to traders, famers and stockiest have started filling inventories looking into the better quality of crop after a gap of one week. Turmeric prices in Warangal, Kesamudram and Nanded mandis are witnessing higher quotes. Demand from local consuming centres is seen improving, as many states have lifted lockdowns. Export demand for the spice is also seen gaining pace. Jeera futures (July) is expected to hold on to the support near 13300 levels and show upside moves towards 13800-14000 levels. The export demand is looking firm as other export competitors like Turkey and Syria have lower exportable surplus to offer. Back at home, Traders' estimates indicate that production of Jeera/Cumin may fall by??10 to 15%??compared to last year.??Production was??around 92 lakh bags (55 kg per bag)??in 2019-2020. This season the output may be between 85 and?? 90 lakh bags.?? The recent tumble in Indian Rupee to levels above 74 per US dollar is also making exports attractive for local growers. Dhaniya futures (July) is looking bullish towards 6900-7000 taking support near 6600. Lower arrivals against steady demand on the spot markets shall cushion the prices. In recent says, there has been slower pace of supplies as farmers are busy with sowing. Moreover with the reopening of HoReca sector the demand is catching pace, and therefore stockiest are expecting business activities to improve gradually. The farmers are also not interested to deal at lower offers in anticipation of getting better prices in near future.
Gold holds tight range throughout the week, on mixed Fed officials on stimulus withdrawal kept investors on their toes. A day after Fed Chairman Jerome Powell said interest rates would not be raised too quickly, two Fed officials said on 23RD Jun a period of high inflation may last longer than anticipated, with Atlanta Fed President Raphael Bostic expecting a rate increase in late 2022. New orders for key U.S.-made capital goods unexpectedly fell in May, likely held back by shortages of some products, but a solid increase in shipments suggested business spending remained strong in the second quarter. The Bank of England said inflation would surpass 3% as Britain’s locked-down economy reopens, but the climb further above its 2% target would only be “temporary” and most policymaker’s favored keeping stimulus at full throttle. Some investors view gold as a hedge against higher inflation that could follow stimulus measures. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.4% to 1,042.87 tonnes. On the technical front, gold fell below the psychologically significant $1,800-per-ounce mark and other key support levels, including the 100-day and 200-day moving averages, which is usually viewed as a bearish sign. Ahead in this week, we may continue to witness huge volatility and gold may trade with bearish bias but we may also witness buying from lower levels and range would be 45800-49400 whereas, Silver may trade in the range of 66100-71200 levels. Whereas on COMEX gold may trade in the range of $1750- $1840, Gold faced technical resistance around
Soybean futures (July) is expected to trade with a positive bias in the range of 6800-7200 as there is constraint in underlying fundamentals on the supply side. Slow monsoon progress and lesser availability of certified soybean seeds may impact Kharif sowing of the oilseed in Madhya Pradesh and Rajasthan, top two producers of the crop in the country. Though sowing has started in some parts of Madhya Pradesh it is yet to pick up in many places due to lesser rains. Sowing of soybean generally gets completed by the first week of July. Rains have not picked up in Madhya Pradesh and Rajasthan for sowing to gather momentum. In the international market, the market participants are cautious and looking to de-risk ahead of the June 30 USDA report when they will get important updates to stocks and acres.RM Seed futures (July) is looking bullish and can see higher levels of 7100-7200, taking support near 6850. Demand for this oilseed is increasing as health consciousness is growingand people are now reinventing the time-tested goodness of mustard oil in helping people stay fit. The counter is also taking positive cues from upside bias prevailing in domestic soybean prices, amid news of seeds shortage this season. Soy oil futures (July) is expected to consolidate in the range of 1210-1280 levels, while CPO futures (July) is expected to trade with a positive bias towards 1025-1035, taking support near 975. Various factors such as the Government putting on hold the decision to cut the import duty, news of lower output of soybean in domestic market, reopening of restaurants as well as eateries in various states are expected to lend positive sentiments to the edible oil counters.
Crude Oil prices rose, holding close to their highest in almost three years, supported by drawdown’s in U.S. inventories and accelerating German economic activity. Prices also drew support from doubts about the future of the 2015 Iran nuclear deal that could end U.S. sanctions on Iranian crude exports. On 23RD Juns, both benchmarks hit their highest since October 2018. Data from Germany showed the largest upward leap in retail conditions since German reunification more than three decades ago, stoking expectations European fuel demand will recover. Across the Atlantic, U.S. crude inventories dropped to their lowest since March 2020, official data showed. U.S. gasoline stocks also posted a surprise draw. The OPEC+ that meets on July 1, have been discussing a further unwinding of last year's record output cuts from August but no decision has been made, two OPEC+ sources said. Ahead in the week crude oil prices may continue to trade with bullish bias in the range of 5150- 5700 with higher volatility. Natural gas markets have rallied quite significantly throughout the week and to reach towards the $3.40 level. Natural gas prices consolidated and moved slightly lower as prices are already in overbought territory. The weather forecasts continued to come in spotty, highlighted by a few small changes to the long-range outlook on Wednesday. However, the pattern was still expected to result in relatively light demand east of the Plains for the next few days, according to NatGasWeather. Ahead in this week, we may expect prices may trade within a tight range where support is seen near 240 and resistance is seen near 265.
Cotton futures (July) is expected to hold on the support near 23800 & trade with an upside bias. The market participants are closely watching the sowing progress in the domestic & overseas as well. Weather disturbance in Texas is adding an upside momentum to cotton prices in the international market. Back at home, lower arrivals due to lean season & reopening of lockdowns has increased the demand from the textile mills. Guar seed futures (July) is expected to take support near 3950-3900, while guar gum futures (July) may continue to take support around 6150-6100 and trade with an upside bias. In the present scenario, there is anticipation that the sowing area in major growing areas may not lower as compared to last year as farmers are seen diverting to pulses & cotton. As of now all focus is on progress of monsoon which has slowed in north India including Haryana and Rajasthan, the major guar growing belts in India. Meanwhile, bullish trend in crude oil is positive for guargum export sales as the commodity is used in oil driling and mining industry. Mentha oil futures (July) is expected to face resistance near 1140- 1050 and witness correction towards 1080-1070. This is due to rising selling pressure amid increased arrivals on the spot markets. Earlier, due to the torrential rains, the early crop of Mentha, was getting spoiled in the fields itself, but since the weather changed to sunny, the farmers have started harvesting the crop. Farmers were seen crushing the crop on mentha tanks throughout the day. If the sun shines like this and the weather is right, then it will be very beneficial for the crop.
Base metals may trade in the range with positive bias. U.S. President Joe Biden embraced a bipartisan Senate deal to spend hundreds of billions of dollars on infrastructure projects, building roads, bridges and highways in an expanded effort to stimulate the American economy. China's first round of copper, zinc, aluminium auctions fails to impress the market Beijing’s measures are only managing expectations and deterring speculators rather than solving supply/demand imbalances. Copper may trade in the range of 680-750. Copper prices may get support as a U.S. infrastructure deal boosted hopes for stronger demand of the red metal. Demand for copper is rising for use in renewable energy projects and electric vehicles. China's copper exports are already strong, rising for a third month in May to the highest level since March last year. Zinc may trade in the range of 225-240 while Lead can move in the range of 162-173. It estimates the zinc market recorded a supply-demand surplus of just 31,000 tonnes in January-April, compared with a surplus of 256,000 tonnes in the same period last year and an April forecast for a 353,000-tonne surplus this year. Nickel may trade in the range of 1300-1400. Indonesia is considering a plan to restrict construction of smelters producing nickel pig iron or ferronickel to optimise use of its limited ore reserves for higher-value products, a senior mining ministry official said. Aluminum may move in the range of 185-200. Chinese research house Antaike also raised its forecast for China's primary aluminium imports this year to 700,000 tonnes from 450,000 tonnes, although it maintains shipments will not match the bumper arrivals in 2020.
COPPER MCX (JUL) contract closed at Rs. 725.85 on 24th Jun’2021. The contract made its high of Rs. 804.60 on 12th May’2021 and a low of Rs. 690.00 on 21st Jun’2021. The 18- day Exponential Moving Average of the commodity is currently at Rs 727.49. On the daily chart, the commodity has Relative Strength Index (14-day) value of 44.873.
One can buy above Rs. 730 for a target of Rs. 760 with the stop loss of Rs. 715.
GOLD MCX (AUG) contract closed at Rs. 46870.00 on 24th Jun’2021. The contract made its high of Rs. 49721.00 on 01st Jun’2021 and a low of Rs. 44501.00 on 30th Mar’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 47658.50. On the daily chart, the commodity has Relative Strength Index (14-day) value of 35.348.
One can sell near Rs. 47300 for a target of Rs. 46100 with the stop loss of Rs. 47900.
REF. SOYA NCDEX (JUL) contract was closed at Rs. 1237.30 on 24th Jun’2021. The contract made its high of Rs. 1445.30 on 18th May’2021 and a low of Rs. 1172.50 on 21st Jun’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1271.26. On the daily chart, the commodity has Relative Strength Index (14-day) value of 41.970.
One can buy near Rs. 1265 for a target of Rs. 1340 with the stop loss of Rs 1225.
CRB closed up marginally as market was eyeing on better outcome of PMI, Durable goods and other data. Commodities also reacted on the statement of Mr. Powell. The U.S. dollar vacillated below an 11-week high versus major peers as traders navigated conflicting signals from Fed officials on the timing of a withdrawal of monetary stimulus.On Wednesday, two Fed officials said a period of high inflation in the United States could last longer than anticipated, just a day after Fed Chair Jerome Powell played down rising price pressures. Energy performed vey well; both crude oil and natural gas prices surged. Oil prices hit new highs since 2018 on Wednesday after government supply-demand data showed not only the lowest U.S. crude stockpiles prior to the Covid-19 outbreak but also a huge surprising drawdown in gasoline that attested to a strong run-up to summer driving. However, oil prices gave up their early highs after reports that producer group OPEC+ affirmed it would add 500,000 barrels per day to its August output, after a 440,000-bpd hike in July. Natural gas prices saw sharp increase and breached the resistance of 251. Prices rose on warmer weather news and storage currently sits at a 6% deficit to the fiveyear average, which is again a bullish trigger. Base metals saw wild swings in both side. Good data and lower level stimulated buying whereas upside in dollar index capped the upside. Euro zone business growth accelerated at its fastest pace in 15 years this month as the easing of more lockdown measures drove a boom in the bloc’s dominant services industry, a survey showed. U.S. manufacturing PMI was a better-than-expected 62.6 in June, while the services PMI was lower than expected at 64.8.Germany’smanufacturing PMI for June was a better-than-expected 64.9.In the U.K., the manufacturing PMI was a better-than-expected 64.2, while the services PMI was lower than expected at 61.7. Bullion traded in range on ambiguity in Fed Statements. Gold prices edged lower as a stronger dollar dented the metal’s appeal, while investors awaited more U.S. economic data due this week to gauge inflationary pressures. Spices saw some correction from the higher side. The sentiments are bearish on the spot markets and prices are quoting lower due to sluggish demand from local stockists amid poor quality of arrivals in the market.Supply pressure in the market is also weighing on prices. Several soybean farmers in Madhya Pradesh have alleged that the sowing of the Kharif crop has not even begun in 60% area even two months after the beginning of the season due to shortage of certified seeds, provided by the government. Renewed demand augmented oil seeds prices.
Inflation concerns have gripped global markets leading to increased volatility. Inflation concerns remain top of the mind particularly in the US, China, UK and Indian markets. The inflation rate in the US has touched to a 13-year high of 5%, which is way above the Federal Reserve target of 2% and reflecting a broad increase in prices confronting Americans. China’s producer price index added 9 per cent in May, its biggest year-on-year increase since September 2008. British inflation unexpectedly jumped above the Bank of England's target in May when it hit 2.1%. Rising Inflation risks are sparking worries in the US, China and Europe that a continued increase in commodity prices could dent the global economic recovery from the coronavirus.
China in action against inflation
Meanwhile China, the biggest producer & consumer of Commodities, has taken a
cognizance about rising inflation and taking measures to rein in the prices of raw
materials that are likely to reduce pressure on China’s factory prices in the coming
weeks. China will issue new rules on the management of price indexes for
commodities and services, as the government steps up scrutiny of the country's
commodity markets and battles to contain inflation. The measures, effective
from Aug. 1, will standardise how price indexes are compiled and improve
transparency on the release of information, the National Development and
Reform Commission (NDRC) said. The NDRC said it would tighten its monitoring of
commodity prices and strengthen market supervision.
China's fast-growing commodity markets are served by many, mostly private index providers that sell price data on major raw materials, including grains, metals and oil products, to traders and analysts. In some cases, the pricing data is used to settle physical trades of commodities or underpins a derivative. Shanghai-based Mysteel's rebar index underpins Singapore Exchange's China rebar contract, launched on May 31. Other providers include Shandong Zhuochuang Consulting Co Ltd, which produces a fuel index based on data from 70 cities and is used by the NDRC for its price monitoring.
New rules are basically stern monitoring
These steps would help to Chinese authorities to deal with the situation of rising inflation. They would try to clamp down on commodity speculation by monitoring of commodity prices and market supervision.
Indian Rupee ended the week with a negative note below 74.00 after oil prices hits the highest levels notably Brent above $75.00. Additionally importers led buying of dollar weigh rupee further. Next week we think the weakness in rupee will continue and may find strong support around 74.50 versus dollar. Meanwhile, slew of economic data was released in US showed an uneven recovery. Goods Trade Balance (-$88Bn), Retail Inventories (-0.8%), Durable Goods Orders (+2.3%) for May were all less than expected. GDP Q1 (+6.4%) and Core PCE (+2.5%) were unchanged from the previous period and met expectations. Jobless Claims for the week ending June 19 at 411K were higher than expected which kept dollar index below 92.00. On the majors, the UK pound fell after the Bank of England kept policy unchanged; effectively pushing back against speculation that rising inflation should be met with a start to removing its excessive monetary stimulus. Next week upside in GBPINR may get capped around 104.00 while the euro edged higher in line with broad dollar weakness, and following the German IFO Survey for June, which showed an improved business climate.
USD/INR (JUL) contract closed at 74.2075 on 24-Jun-21. The contract made its high of 74.4550 on 22-Jun-21 and a low of 74.1025 on 22-Jun-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 74.0129.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 56.75. One can buy at 74.25 for the target of 74.25 with the stop loss of 73.75.
GBP/INR (JUL) contract closed at 103.3625 on 24-Jun-21. The contract made its high of 103.8375 on 23-Jun-21 and a low of 102.3650 on 21-Jun-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 103.7684.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 46.74. One can sell at 104.00 for a target of 103.00 with the stop loss of 104.50
| 24th JUN | Biden agrees $1tn infrastructure deal with senators |
| 24th JUN | Bank of England says inflation likely to exceed 3% in coming months |
| 23th JUN | Biden pushes for high-level meetings with Beijing officials |
| 23th JUN | UK inflationary pressures hit record highs as economic activity rebounds |
| 23th JUN | Fed leadership tries to steady policy message after market gyrations |
| 23th JUN | UK exporters get more than £12bn in government financial aid |
| 22nd JUN | House prices climb to record levels in US and Europe |
| 22nd JUN | Brexit poll shows ‘limited enthusiasm’ for UK-EU trade deal |
| 21st JUN | Fed’s Williams says US economy does not yet justify policy shift |
EUR/INR (JUL) contract closed at 88.6200 on 24-Jun-21. The contract made its high of 88.8050 on 23-Jun-21 and a low of 88.0000 on 21-Jun-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 88.8761.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 40.98. One can sell at 89.00 for a target of 88.00 with the stop loss of 89.50.
JPY/INR (JUL) contract closed at 66.9925 on 24-Jun-21. The contract made its high of 67.7725 on 21-Jun-21 and a low of 66.8075 on 24-Jun-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 67.3533.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 42.94. One can buy at 67.00 for a target of 68.00 with the stop loss of 66.50.
Shyam Metalics and Energy opened strong and closed at nearly 23 percent premium on June 24, the first day of trade on the bourses, supported by positive secondary market conditions and talk of a favourable commodity cycle ahead. Shyam Metalics, which primarily produces intermediate and long steel products such as iron pellets, sponge iron, steel billets, TMT, structural products, wire rods, and ferroalloy products, is in the process of increasing the capacities of its manufacturing plants and captive power plants to 11.60 million tonne per annum (MTPA) and 357 MW from current 5.71 MTPA and 227 MW respectively. The proposed expansion is expected to become operational between FY22 and FY25. The company raised Rs 909 crore from its public issue, which comprised a fresh issue of Rs 657 crore and an offer for sale of Rs 252 crore. The proceeds from the fresh issue will be used for repaying a debt of Rs 470 crore.
Sona BLW Precision Forgings (Sona Comstar) shares made a strong market debut, closing 25 percent higher on June 24. Sona Comstar is primarily engaged in designing, manufacturing, and supplying high-quality mission-critical automotive components such as differential assemblies, gears, conventional and microhybrid starter motors, etc. The firm supplies its products across the countries such as India, US, Europe, and China, through its 9 manufacturing and assembly facilities across the USA, India (6), China, and Mexico. Sona Comstar mobilised Rs 5,550 crore from investors through its public issue, of which Rs 5,250 crore went to selling shareholder Singapore VII Topco III Pte Ltd, an affiliate of The Blackstone Group. The net fresh issue proceeds will be utilised for repaying of debt of Rs 241 crore.
Three companies -- Clean Science and Technology, Shriram Properties and GR Infraprojects -- have received markets regulator Sebi's to raise funds through initial public offers (IPOs). The three firms had filed their preliminary papers with Securities and Exchange Board of India (Sebi) in April. Clean Science and Technology, Shriram Properties and GR Infraprojects have obtained Sebi's observations on June 12, June 15 and June 16 respectively, according to an update with Sebi. Sebi's observation is very necessary for any company to launch an initial public offer (IPO), follow-on public offer (FPO) and rights issue. Speciality chemical manufacturer Clean Science and Technology plans to raise Rs 1,400 crore through its initial share sale. The IPO is entirely an offer for sale (OFS) by existing promoters and other shareholders, according to draft red herring prospectus. Those offering shares in the OFS include Anantroop Financial Advisory Services, Ashok Ramnarayan Boob, Krishnakumar Ramnarayan Boob, Siddhartha Ashok Sikchi, and Parth Ashok Maheshwari. Clean Science Technology manufactures functionally critical specialty chemicals such as performance chemicals, pharmaceutical intermediates and FMCG chemicals. Its products are used as key starting level materials, as inhibitors, or as additives, by customers, for products. Bengaluru-based Shriram Properties proposes to raise up to Rs 800 crore through IPO. Out of the total IPO size, it plans to raise Rs 250 crore through fresh issue of equity shares and Rs 550 crore through offer for sale. Shriram Properties has proposed partial exits to its four existing investors --TPG Capital, Tata Capital, Walton Street Capital and Starwood Capital -- which hold around 58 per cent stake in the company. In offer for sale, each of the selling shareholders will be entitled to their respective portion of the proceeds from the offer for sale in proportion of the shares offered by them. The company will not receive any proceeds from the offer for sale. GR Infraprojects plans to raise Rs 800-1,000 crore through an initial share sale. The public issue will be a complete OFS of 1,15,08,704 equity shares by promoter and investor selling shareholders, according to the draft red herring prospectus.
Vijaya Diagnostic Centre Ltd, a leading integrated diagnostic chain in southern India, has filed its Draft Red Hearing Prospectus with Securities and Exchange Board of India (SEBI). Through the initial public issue, according to sources, the company aims to list the equity shares on the stock exchanges and make “Offer of Sale” of up to 3.57 crore (3,56,88,064) equity shares by the selling shareholders. The ‘Offer for Sale’ comprises up to 0.51 crore (50,98,296) equity shares by Dr. S Surendranath Reddy (Promoter Selling Shareholder), up to 2.95 crore (2,94,87,290) equity shares by Karakoram Ltd and up to 0.11 crore (11,02,478) equity shares by Kedaara Capital Alternative Investment Fund- Kedaara Capital AIF 1. In 2016, Kedaara Capital had picked up a 40 per cent stake in the diagnostic chain for about ?400 crore. The face value of equity share is ?1 each. The company will not receive any proceeds from the Offer. The diagnostics company, founded in 2002 as a private company, offers about 740 routine and 870 specialized pathology tests and approximately 220 basic and 320 advanced radiology tests that cover a range of specialties and disciplines. The company also offers a broad spectrum of health and wellness packages through its ‘hub and spoke’ model, whereby specimens are collected across multiple locations within a catchment area or a region for delivery to our reference laboratories for diagnostic testing. It has a network of 80 diagnostics centres and 11 reference laboratories across 13 cities and towns in Telangana, Andhra Pradesh, National Capital Region and Kolkata. ICICI Securities Ltd, Edelweiss Financial Services Ltd and Kotak Mahindra Capital Company Ltd are the Book Running Lead Managers to the issue.
Capital market regulator Sebi is planning to come out with framework on special purpose acquisition companies (SPACs), which will enable listing of startups on domestic stock exchanges. The regulator is expected to put in place guidelines in this regard next week, they added. SPACs or blank cheque companies are formed to raise capital in an initial public offering (IPO) with the purpose of using the proceeds to identify and merge with a target company. SPACs are usually formed by private equity funds or financial institutions, with expertise in a particular industry or business sector, with investment for initial working capital and issue related expenses. Such companies have recently become popular in the US.
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SEBI has announced modifications in the norms for investment and disclosure by mutual funds in derivatives. Accordingly, mutual funds may enter into plain vanilla Interest Rate Swaps (IRS) for hedging purposes. The value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the scheme. In case of participation in IRS is through over the counter transactions, the counter party has to be an entity recognized as a market maker by RBI and exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the scheme.
According to data from AMFI, overnight and liquid funds, where large companies park their short-term surplus cash, saw a net outflow of Rs 57,020.37 crore in May, which can be attributed to the urgency to hold immediate cash. Low yields also prompted the companies to retreat. Amid restrictions on people’s movement, companies are incurring certain overheads without any yields. However, the flow trend is expected to reverse, depending on the unlocking program.
In a follow-up to its order issued last week, the capital market regulator Securities and Exchange Board of India (SEBI) on June 14 imposed monetary penalties on Sanjay Sapre, its chief executive officer, and its debt fund managers, among other top officials. It fined Sapre and Santosh Kamath, the chief investment officer of its fixed income management, a sum of Rs 3 crore each. SEBI also fined other debt fund managers of Franklin Templeton, namely Kunal Agarwal, Sumit Gupta, Pallab Roy, Sachin Padwal Desai and Umesh Sharma a sum of Rs 1.50 crore each. As stated in its last week's order against the fund house, SEBI observed that there were similarities in the way the six wound-up debt funds were managed. It had observed that all the six schemes had atleast 65 percent of their assets in securities that were rated AA and below. It had also incorrectly calculated the Macaulay Duration (MD); a statistic that measures a debt fund's sensitivity to interest rates. An incorrect calculation of MD makes the fund look, for instance, less riskier than it actually is. In the case of Franklin Templeton, SEBI observed that it had pushed many long-dated securities as short-dated, and thereby the MD os schemes looked artificially lower than what they ought to have been.
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