In the week gone by, global stock markets were volatile tracking mixed global cues as investors weighed the impact of elevated inflation on an economic recovery and looked ahead to earnings reports. US markets looked weak amid concerns on elevated commodity prices and other signs of inflation heading into the corporate earnings season. Now Investors are waiting for more data on corporate earnings. European stock markets closed mostly lower as investors monitor the outlook for inflation, supply chain issues, bond yields and central bank policy. Meanwhile, China Evergrande Group missed its third round of bond payments in three weeks, intensifying market fears over contagion involving other property developers as a wall of debt payment obligations come due in the near-term. To note, a total of $92.3 billion bonds issued by Chinese developers will be due in the next year. The IMF cut its global growth forecast, citing supply chain challenges and persistent Covid spread.
Back at home, domestic markets witnessed volatile movement due to weak global cues. Beside, weakening of the rupee and inflationary pressure is weighing on the investors sentiment. Investors also grew more nervous ahead of the third-quarter earnings reporting season as TCS disappointed investors but with Infosys and Wipro announcing better than expected earnings, buying resumed in information technology stocks. Recently it could be seen that Companies are rushing to raise bond funds after the Reserve Bank of India took steps to cut easy money in its bi-monthly policy last week, resulting in an uptick in rates. Meanwhile, the Consumer Price Index-based (CPI) inflation for September 2021 came in at 4.35 percent, compared with 5.30 percent in August. The decline in CPI inflation to 4.35 per cent in September is positive since it supports the RBI's view on inflation and will allow the MPC to continue with the accommodative monetary stance. As the low base effect slowly wears off, industrial production in India continued to stabilise in August, expanded by 11.9 percent yearon- year (YoY) in August, rising slightly from 11.4 percent in July. As per latest projections by the International Monetary Fund (IMF), India's economy is expected to grow by 9.5 per cent in 2021. At present stock markets are relieved temporarily by the dovish tone of the central banks but are aware of the rate hike possibilities going ahead. Now all eyes are on the ongoing September quarter earnings season.
On the commodity market front, CRB looked tired near 250 levels. Bullion counter slowly crawled towards north despite the continuous upside roaring move in dollar index. In six weeks’ time period dollar index appreciated from 92.1 to 94.56 on tapering news. Fall in 10 years treasury yield also supported minor rise in gold prices. It fell from 1.63 to 1.56 last week. Depreciation in INR added momentum in MCX gold and it tried to close near 47900. Gold and silver are expected to trade in range of 46800-48300 and 60800-63500. Energy counter has seen much needed correction on buildup in inventories amid some downward revision in world GDP. Base metals may trade in a range with upside bias. Oil seeds and edible oil futures may continue to trade in pressure on record import amid imposition of stock limit. Inflation Rate of New Zealand, GDP Growth Rate of China, Core Inflation Rate and Inflation Rate of UK, Euro Area and Canada etc are few important triggers scheduled for commodities this week.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBIregistered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.
SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.
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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.
The company is doing well and has comfortable balance sheet and surplus cash position. According to the management of the company, mining, cement industry to see further pick-up in activity as the global economy further revives and travel normalises, which will drive AIA's product requirements. Further it is expected that scope of margin will see improvement due to better order book, better operating efficiencies along with better utilizations of capital equipment. Thus, it is expected that the stock will see a price target of Rs.2253 in 8 to 10 months’ time frame on target P/Ex of 29x and FY23 BVPS (Book Value per Share) of Rs.77.69.
The company is witnessing robust recovery in demand from the tyre manufacturers post the easing of regional lockdown restrictions . With the commissioning of new speciality black capacities, the company expects strong growth in sales volume of speciality black in coming years. The company expects to benefit from the completion of a strong capex cycle undertaken by the domestic tyre industry and remains positive about the growth momentum in automobile demand. It is expected that the stock will see a price target of Rs.303 in 8 to 10 months time frame on a three year average P/BVx of 2.02x and FY23 BVPS of Rs.150.00.
The stock closed at Rs 1646.35 on 14th October, 2021. It made a 52-week low at Rs 303.00 on 27th October, 2020 and a 52-week high of Rs. 1717.20 on 07th June, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1198.26.
After registering all time high, stock witnessed a healthy correction and consolidated in wide range for few months with positive bias and was formed a “Continuation Triangle” on weekly charts which is bullish in nature. Last week, stock has given the pattern breakout along with high volume and also ended near week’s high which shows strong buying for the stock. On the technical indicators front such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 1620-1630 levels for the upside target of 1800-1840 levels with SL below 1550 levels.
The stock closed at Rs 331.35 on 14th October, 2021. It made a 52-week low of Rs 162.90 on 15th October, 2020 and a 52- week high of Rs. 335.80 on 14th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 252.94.
Short term, medium term and long term bias is looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this it was formed an “Inverted Head and Shoulder” pattern on weekly charts and was given the pattern breakout along with high volumes and managed to close higher so follow up buying may continue for coming days. Therefore, one can buy in the range of 322- 325 levels for the upside target of 360-365 levels with SL below 300 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
Indian markets scaled to its record highs in the week gone by as Nifty indices surpassed above 18300 level and Bank Nifty above 39300 levels on back of strong global markets along with favourable inflation data and good numbers released by Infosys and Wipro. Rally was also well supported by leading Banking names like HDFC bank, ICICI Bank and SBI. From derivative front put writers were seen shifting to higher bands while call writers were observed covering their short positions at 18200 & 18300 strikes. Implied volatility (IV) of calls closed at 14.37 % while that for put options closed at 14.85. The Nifty VIX for the week closed at 16.10%. PCR OI for the week closed at 1.64. Technically both of the indices (nifty and banknifty) can be seen trading in a rising channel with formation of higher bottom pattern. For upcoming week 18000 level will likely to act as a strong support for Nifty while 38500-39000 zone would act as a strong demand zone for banking index. We expect that the bias is likely to remain in favour of bulls as far Nifty holds 17800 levels on downside.
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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
10 Turmeric futures (Nov) traded under pressure last week due to steady demand and technical selling at higher levels. It may trade lower towards 7100 levels with resistance at 7400. Turmeric production in the 2021-22 (Jul-Jun) is likely to be higher on improved area and favorable weather. Moreover, higher carryover stocks and lack of bulk demand is keeping prices in range. Last month, the prices were down 8% but still trading higher by 30% y/y. In the first 4-months (Apr-Jul) of FY 2021/22, exports down 26% to 53000 tons Vs last year but at par with 5-year average. Jeera futures (Nov) trading in a range and witnessing selling pressure from higher levels. We expect it to trade lower towards 14300/14200 with resistance at 14900. The prices in the spot market steady at Unjha despite good demand from exporters. Clear weather and comparatively higher prices have increased arrivals in the physical market. Sufficient stocks with traders and farmers keeping prices under control. Good September rains in Gujarat may bring good crop next season. Dhaniya futures (Nov) fell about 2% last week due to fresh selling at higher levels. We expect it to trade in a range of 7900- 8200 with support at 7800 and resistance at 8200. Lower prices are now attracting new demand in coriander while festival demand and limited arrivals due to kharif harvesting may support prices. Market is also looking for export demand for price support. Exports of coriander down 10% during Apr-Jul period to 17830 tonnes Vs 19820 tonnes last year but 17.7% higher compared to 5-year average. Sufficient rains in Gujarat and Rajasthan during September expected to help rabi crop in coming season.
Gold prices may trade in the range as better-than-expected U.S. consumer price data raised bets the Federal Reserve would tighten its policy earlier than anticipated. U.S. consumer prices increased solidly in September and are likely to rise further amid surging energy prices. This could pressure the Fed to act sooner to normalise policy. Minutes from the Fed’s September meeting showed the central bank could start reducing stimulus by mid-November. While a growing number of policymakers were worried that high inflation could persist longer than thought, they were split over how soon they may need to raise rates in response. The dollar index steadied, while benchmark U.S. 10-year Treasury yields were stable after pulling back from a more than four-month high. Reduced central bank stimulus and interest rate hikes tend to push government bond yields up, translating into a higher opportunity cost for holding gold that pays no interest. Gold is also running into some renewed physical buying, with some investors looking to hedge against the economic uncertainty, rising inflation. Gold’s downside remained protected because of inflationary pressures, especially given a surge in energy costs. But heightened prospects for Fed tapering, widely expected to start in November, and chances of Treasury yields continuing to gain, are expected to heap more pressure on zero-yielding gold. As long as gold remains under pressure, silver is also likely to find it difficult to get out of the defensive. This week Gold prices may trade in the range of 47400-48900 on MCX & $1775-$1820 on Comex while silver prices may trade in the range of 62200-65000 on MCX & $22.60-$23.55 on Comex.
Soybean futures (Nov) fell more than 5.7% last week on edible oil import duty cut and stock limits on oilseeds/edible oils. Prices may trade lower towards 5000 with resistance at 5375 levels. The soybean arrivals are likely to peak around first –second week November, as weather is now clear and favorable for harvesting. Bulk traders and oil mills are looking to procure soybean during the peak arrival period at lower prices. In the monthly report, US production was forecast up 1.79% to 121 mt vs 119 mt last month. According to SOPA, India's soybean production estimated at 118.9 lakh tonnes (lt) compared to 104 lt last year. Currently, soybean prices are ruling way higher than the MSP of 3950 rupees per 100 kg. Edible oil prices fell sharply last week on reports of largest single month import of edible oil along with significant cut in import duty of edible oil by the government. As per month import data released by SEA, India registered a record import of vegetable oils close to 17 lakh tonnes in September this year. It is 66% higher compared to the corresponding month last year. In an another development, government slashed the basic customs duty on both crude and refined palm oil, soybean oil and sunflower oil till March 2, 2022. Post reduction, crude palm oil, soyoil and sunflower oil imports will be subject to 8.25%, 5.5% and 5.5%t tax in total, respectively, while refined grades of palm oil, soyoil and sunflower oil would carry a 19.25% tax in total each. Ref Soy oil futures (Nov) is likely to trade lower towards 1170 while CPO futures (Oct) likely to trade lower towards 1050 with resistance at 1130.
Oil prices may continue its stellar rally as an energy crisis gripping major economies shows no sign of easing amid a pickup in economic activity and restrained supplies from major producers. The energy crisis sweeping the world is raising the prospect of a difficult northern winter as heating demand rises. Coal and gas prices have also been surging as economies recover, making oil more attractive as a fuel for power generation, pushing crude markets higher. Prices may get support as more vaccinated populations are brought out of coronavirus lockdowns, supporting a revival of economic activity. The Energy Department played down reports that it was looking at selling barrels from the U.S. Strategic Petroleum Reserve. In India, some states are experiencing electricity blackouts because of coal shortages, while in China the government has ordered miners to ramp up coal production as power prices surge. The US Energy Information Administration (EIA) recently raised its estimates of growth in global demand, and now expects that oil demand will marginally exceed the pre-pandemic level of 101 million barrels per day (bpd) by the end of 2022, after a strong recovery to 97 million bpd in 2021. Crude oil prices continue to trade with bullish bias and where prices may touch the 6350 level and support is seen near 5700. Natural gas still has potential to reach 470 but profit booking at higher level cannot be denied. So buying on dip should be a good strategy for this commodity. A combination of supply shortages and lower-than-expected power generation from renewables is forcing utilities to increasingly turn to natural gas and coal in order to maintain the required base load across the electrical grid.
Cotton futures (Oct) witnessed pressure on prices last week as new season crop is arriving. The prices are still on higher side on reports of production loss due to widespread rains in the cotton growing regions. We expect the price to trade in a range of 28500-30500 with resistance at 30300 levels. Domestic Cotton prices are increasing due to mill demand. USDA increase global cotton production to 120.28 million bales vs 119.59 million bales projected in September. However, cut cotton production in India by 1.75% to 28 million bales (1 US bale= 218kg). Guar seed futures (Nov) jumped 3.3% last week on expectation of lower production and higher demand scenario. This week, we expect it to trade positively towards 6500/6700 if it breaks resistance of 6350 while support is at 5970. Currently, the prices are higher by more than 45% y/y due to lower stocks and persistent export demand. The area under guar in Rajasthan down by about 4 lakh hac compared to last year at 21 lakh hac, lowest acreage in a decade. Guar gum exports expected to pick-up in coming weeks due to increase in US rigs. Castor Seed (Nov) is trading in a range since 4-5 weeks but in declining trend. We expect it trade lower towards 6000 levels, which is also a support, and resistance seen at 6270. Persistent export demand for castor oil and meal kept prices higher this season but expectation of good production may pressurize prices at higher levels. Castor oil export data for Jul -Aug 2021 were lower compared to last year but higher for Apr-Aug period. The late monsoon rains in September is beneficial for castor area in Gujarat for improved production prospects.
Base metals may trade with positive bias on upbeat sentiment in global equities. China's annual factory gate prices rose more quickly than expected in September, driven by soaring raw material prices. However, profit booking at higher level cannot be denied. Electricity prices have reached record highs in recent weeks, driven by power shortages in Asia and Europe, with China's crisis expected to last through to the end of the year and crimp growth in the world's second-largest economy. Copper may trade in the range 740-790. The green energy transition is important, as prospects for copper use in green applications are already influencing market sentiment. However, The global refined copper market will be roughly balanced between supply and demand this year before moving into significant supply surplus in 2022. Zinc can move in the range of 270-310. Zinc prices climbed to their highest level in 14 years recently on supply concerns after producer Nyrstar announced a plan to cut its output by up to 50% at its three European zinc smelters due to high power prices. Lead can move in the range of 178-188. ILZSG anticipated that the global supply of refined lead will exceed demand by a modest amount in both 2021 and 2022, with the extent of the surpluses estimated at 27,000 tonnes and 24,000 tonnes respectively. Nickel may trade in the range of 1450-1550. Prony Resources said that Tesla Inc had agreed to purchase around 42,000 tonnes of nickel in a multi-year deal. Aluminum may move in the range of 240- 260. The price of aluminium has reached a 13-year high due to the deepening energy crisis, which has squeezed supplies of the metal.
SILVER MCX (DEC) contract closed at Rs. 62887 on 13th Oct’2021. The contract made its high of Rs. 65605.00 on 03rd Sep’2021 and a low of Rs.58150.00 on 30th Sep’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs 61519. On the daily chart, the commodity has Relative Strength Index (14-day) value of 56.51.
One can buy near Rs. 62200 for a target of Rs. 64500 with the stop loss of 61100.
CRUDE OIL MCX (NOV) contract closed at Rs. 6034 on 13th Oct’2021. The contract made its high of Rs. 6126.00 on 11th Oct’2021 and a low of Rs. 4980.00 on 09th Sep’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 5749.98. On the daily chart, the commodity has Relative Strength Index (14-day) value of 78.927.
One can buy near Rs. 6000 for a target of Rs. 6400 with the stop loss of Rs. 5850.
JEERA NCDEX (NOV) contract was closed at Rs. 1323.30 on 07th Oct’2021. The contract made its high of Rs. 1411.00 on 26th Aug’2021 and a low of Rs. 1232.00 on 02nd Jul’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1319.90. On the daily chart, the commodity has Relative Strength Index (14-day) value of 51.946.
One can sell near Rs. 14850 for a target of Rs. 14150 with the stop loss of Rs 15170.
CRB looked tired near 250 levels. Bullion counter slowly crawled towards north despite the continuous upside roaring move in dollar index. In six weeks time period dollar index appreciated from 92.1 to 94.56 on tapering news. Three Fed policymakers said on Tuesday the economy has healed enough for the central bank to begin to withdraw its crisis-era support, cementing expectations the Fed will start to taper its monthly bond purchases as soon as next month. Fall in 10 years treasury yield also supported minor rise in gold prices. It fell from 1.63 to 1.56 last week. Depreciation in INR added momentum in MCX gold and it tried to close near 47900. Persistent supply chain disruptions and inflation pressures are constraining the global economy’s recovery from the COVID-19 pandemic, the International Monetary Fund said as it cut growth outlooks for the United States and other major industrial powers. It improved safe haven buying. Both Brent and WTI continued their upward journey on power crunch issues. Oil prices fell pausing a rally that has brought prices to multi-year highs and raised concerns that higher energy costs could derail the global economic recovery. However, Natural gas saw steep decline from the higher side on build up in inventory in US from past 4-5 weeks. It slipped from high of 6.46 to 5.2 in recent trades. But later in week it recovered up to 5.7. Base metals behaved in different way, nickel and lead prices dragged down whereas zinc, copper and aluminum prices appreciated further. China Evergrande Group missed its third round of bond payments in three weeks, intensifying market fears over contagion. Chile's Codelco, the world’s largest copper miner, is offering to sell copper to European buyers at a premium of $128 a tonne in 2022, the highest since 2015 and a rise of more than 20% from this year. The aluminium capacity in China that was closed due to power shortage and energy consumption control previously did not resume.
Cotton saw a fall from high and traded near 30000. The global cotton 2021/22 balance sheet shows lower consumption, higher production, and higher ending stocks compared with last month. Soya prices have slipped 5% as Govt. has imposed stock limits on oilseeds/edible oils with immediate effect to prevent hoarding and check price rise. USDA has scaled up its forecast for global soybean ending stocks in 2021-22 to 104.57 million tonnes (mt), compared to 98.89 mt projected in September. US production was up 1.79% to 121 mt vs 119 mt last month. Jeera prices improved. Physical prices rose sharply amid strong demand from local buyers and exporters. Sufficient stocks with traders and farmers are keeping prices under control. Clear weather and comparatively higher prices have increased arrivals in the physical market.
Lead is widely used in batteries, cable sheaths, machinery manufacturing, shipbuilding, light industry, lead oxide, radiation protection and other industries. Car batteries account for around 80% of global lead demand. International Lead and Zinc Study Group (ILZSG) in its latest report anticipated that the global supply of refined lead metal will exceed demand by a modest amount in both 2021 and 2022, with the extent of the surpluses estimated at 27,000 tonnes and 24,000 tonnes respectively.
Base metal movement in Jan-September 2021(in %)
Global Demand
After falling by 3.9% in 2020, global demand for refined lead metal is forecast to rise by 5.5% to 12.39 million tonnes this year and by 1.7% to 12.61 million tonnes in 2022, International Lead and Zinc Study Group (ILZSG) said in its latest report.
Global Supply
The Group expects world refined lead production to rise by 4.4% to 12.42 million tonnes in 2021 and by 1.7% to 12.63 million tonnes in 2022. In China, refined lead metal output is forecast to increase by 4.7% in 2021 but to grow by a more moderate 1% in 2022.
MCX COMDEX is a significant barometer for the performance of commodities market and would be an ideal investment tool in commodities market over a period of time. This is the maiden flagship real-time Composite Commodity Index in India based on commodity futures prices of an exchange launched in June 2005.
This week rupee plunged to 15 months low as oil prices continues to head north. On top of it higher US yields kept rupee below 75.00 vs dollar. Additionally latest RBI policy which turned out to be more dovish than expected did more damages to rupee downside move. Going forward 75.80 on spot will be pivotal as rupee may find some cushion in the coming days. Additionally dollar remains steady after monthly September CPI data (+0.4%) came in higher than expected (+0.3%) leading market participants to believe that the Federal Reserve will move forward with tapering bond purchases later this year. From the majors, the euro rebounded from its weakest point vs. the US dollar since summer 2020. However, those gains were given back after this morning’s US inflation data. German CPI data for September came in as expected at 4.1%. Additionally European Central Bank member Villeroy recently commented that the Pandemic Emergency Purchase Program (PEPP) will likely end as scheduled in March next year. However, the fixed quantitative easing scheme may need to be held as a policy tool for future monetary policy response. We think EURINR eventually fall in the wake of a weaker EURUSD mode in the coming days.
USD/INR (OCT)) contract closed at 75.4825 on 13-Oct-21. The contract made its high of 75.7850 on 12-Oct-21 and a low of 75.1500 on 11-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 74.7540.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 67.90.One can buy at 75.00 for the target of 76.00 with the stop loss of 74.50.
GBP/INR (OCT)) contract closed at 102.8150 on 13-Oct-21. The contract made its high of 102.9825 on 12-Oct-21 and a low of 102.3950 on 12-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 102.0093.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 63.65. One can buy at 102.80 for a target of 103.80 with the stop loss of 102.30.
| 14th OCT | Evergrande crisis leaves Chinese developers shut out of global debt markets |
| 14th OCT | Fed poised to begin tapering as early as next month |
| 13th OCT | BoE bans MPC members from having private meetings with bankers |
| 13th OCT | US inflation heats up in September as pressures persist |
| 13th OCT | IEA warns spending on clean energy must triple to curb climate change |
| 13th OCT | Eurozone industrial output falls as supply bottlenecks take toll |
| 12th OCT | UK’s recovery will lag behind other G7 nations, IMF forecasts |
| 12th OCT | IMF warns of need to be ‘very, very vigilant’ over rising inflation risks |
| 11th OCT | Yellen hopeful US Congress will pass global corporate tax deal |
EUR/INR (OCT)) contract closed at 87.2725 on 13-Oct-21. The contract made its high of 87.6250 on 12-Oct-21 and a low of 86.9725 on 11-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 86.9320.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 57.25. One can buy at 87.30 for a target of 88.30 with the stop loss of 86.80.
JPY/INR (OCT)) contract closed at 66.4750 on 13-Oct-21. The contract made its high of 67.4800 on 11-Oct-21 and a low of 66.3200 on 13-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 66.7653.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 37.88. One can sell at 66.75 for a target of 65.75 with the stop loss of 67.25.
In the quarter gone by, i.e. July-September 2021, the fundraising of Rs 39,559 crore by 20 companies was higher than the previous two quarters in the mainboard segment. Strong sentiments in the secondary market with BSE Sensex and Nifty50 hitting record highs and surpassing new milestones (60,000 and 18,000 levels, respectively) following economic recovery and strong earnings growth especially after COVID-19 crisis are some of the key reasons for momentum seen in the primary market. Several companies also rushed to raise funds ahead of expected tapering by Federal Reserve. The same momentum was also seen across the globe. "Globally, Q3 2021 saw 18 percent more deals than the previous third-quarter record set in 2007 and 11 percent higher proceeds than the last recordsetting third quarter in 2020. In Q3 2021 alone, there have been 547 IPOs raising $106.3 billion," said EY - Global in its statement. EY further said year-to-date (YTD), there have been a total of 1,635 IPOs raising $330.7 billion, an 87 percent and 99 percent increase year-on-year, respectively. "Overall, Q3 totals YTD have already surpassed 2020 by both deal numbers and proceeds."
Private equity firm Ascent Capital Advisors-backed Radiant Cash Management Services has filed the Draft Red Herring Prospectus with capital markets regulator Sebi to raise funds via initial public offering. The IPO comprises a fresh issue of Rs 60 crore, and an offer for sale of over 3.0125 crore equity shares by promoter and investor. Promoter Colonel David Devasahayam is going to sell up to 1.0125 crore equity shares and private equity firm Ascent Capital Advisors India will offload 2 crore equity shares through offer for sale route. The company intends to utilise net proceeds from fresh issue for working capital requirements (Rs 20 crore), and capital expenditure (Rs 23.92 crore) besides general corporate purposes. Ascent Capital Advisors India holds 37.21 percent (3.76 crore equity shares) stake in Radiant Cash Management Services and its average price of acquisition of these shares is Rs 21.23 per equity share, as per the information provided in the prospectus. As per DRHP, the Indian cash management services market revenue grew at a CAGR of more than 10 percent during the period between FY10 and FY21, growing from approximately Rs 1,000 crore to Rs 2,770 crore during this period. The RCM market is estimated at Rs 680 crore in FY21 and is projected to reach a market size of Rs 2,040 crore by FY27, growing at a CAGR of 20.3 percent. The company appointed IIFL Securities, Motilal Oswal Investment Advisors and Yes Securities (India) as merchant bankers to manage the IPO.
The Securities and Exchange Board of India (Sebi) has given its approval for the initial share sales of three companies, including SJS Enterprises and One Mobikwik Systems Ltd. Medical equipment maker Skanray Technologies Ltd has also received the nod from the watchdog for its initial public offering (IPO). The three companies have been issued observations by the watchdog, according to the update on the processing status of draft offer documents as on October 8. One Mobikwik Systems Ltd is a leading mobile wallet (MobiKwik Wallet) and Buy Now Pay Later (BNPL) player in India. The company, which filed the Draft Red Herring Prospectus (DRHP) for the IPO in July, plans to offer shares aggregating to Rs 1,900 crore. This will comprise raising Rs 1,500 crore through fresh issue of shares and Rs 400 crore-worth stocks will be offloaded through the Offer-for-Sale (OFS) route by existing shareholders. SJS Enterprises plans to garner Rs 800 crore through the initial share sale. It will be an OFS of Rs 688 crore by Evergraph Holdings Pte Ltd and Rs 112 crore by KA Joseph. The firm, a leading player in the Indian decorative aesthetics industry, had filed the preliminary papers in July. Skanray Technologies had filed DRHP in June. Its IPO will comprise fresh issue of equity shares, aggregating up to Rs 400 crore, and OFS of up to 14,106,347 equity shares by promoters and existing shareholders.
New age logistics and supply chain startup Delhivery has converted itself into a public company ahead of the filing of its draft prospectus with the Securities and Exchange Board of India (Sebi). According to the regulatory filings sourced through business intelligence platform Tofler, Delhivery Private Ltd has become Delhivery Ltd. The Guragon-baed firm is looking to raise close to $1 billion through an initial public offering (IPO), scheduled before the end of the current financial year. In June this year, Delhivery's cofounder & CEO, Sahil Barua, had told ET in an exclusive interview that the company was targeting an IPO anywhere between December this year to March 2022. The company, backed by Japan’s SoftBank Vision Fund and Carlyle Group Inc, among others has also split shares in the ratio of 1:10.I n the regulatory filings, the company said it was looking to adjust its compulsorily convertible preference shares (CCPS) in the ratio of 10:1 -- 10 equity shares of Rs 10 each for every 1 CCPS of Rs 100 each held by such CCPS holder, pursuant to such bonus issuance.
Zostel (Zo Rooms) has written to markets regulator the Securities and Exchange Board of India, requesting it to reject Oyo's draft red herring prospectus (DRHP) and suspend its proposed initial public offering (IPO). ET has reviewed a copy of the letter. We first reported Zostel's plan to move Sebi on October 4, saying it had firmed up plans to ask the regulator to restrict Oyo's $1.2-billion IPO, citing its ongoing legal dispute with the Gurgaon-based firm. In its letter to Sebi, Zostel said Oyo’s IPO is “non-maintainable as Oravel’s capital structure is not final”. Accordingly, Oravel’s filing of the DRHP in the circumstances, is illegal, in view of the stipulation contained under Regulation 5(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations).” It added, “The DRHP is replete with material omissions and blatant misstatements, intended to mislead the public into investing into Oravel’s shares without appreciation of the risk involved.” Interestingly, Zostel’s note includes a presentation by Oyo promoter SoftBank, which in an earnings report in 2016 mentioned that Oyo had acquired Zostel.
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New SIP account registrations increased to a record 2.68 million in September 2021, according to data from the Association of Mutual Funds in India (AMFI). It was nearly 2.5 times higher than the long-term average. It was the fourth consecutive month of new SIP registrations topping 2 million. The high pace of new SIP registrations boosted net additions to 1.654 million in September 2021 - an all-time high - which offset the pressure from 1.026 million SIP accounts being discontinued in the same month. The cumulative net SIP registrations in the first half of FY22 stood at 7.66 million. New SIP additions have helped the monthly SIP book expand to a record high of ₹10,351 crore in September 2021. The SIP book has grown at 22.8% on an annualised basis over the last five years, which has catapulted assets under management of the funds linked to the SIP accounts to ₹5.44 lakh crore in September 2021. This is equivalent to 14.83% of the total industry AUM. Average ticket size for investment in the SIP accounts stood at ₹2,305. This has been shrinking in the last few months as a large part of new SIP registrations were generated by the digital platforms where ticket size drops below ₹500 for bulk of new investors. The long-term average of ticket size of SIP accounts has been ₹2,923. The rolling cumulative inflow from the SIP accounts in the six months till end of September 2021 has been ₹56,452 crore, the highest since data has been available with the AMFI.
Inflows to equity mutual funds stabilised in September and were almost similar to August figures. The trend of NFOs contributing a big amount continued in September as well, AMFI data revealed. Investors poured in a net Rs 8,677.41 crore in equity mutual fund schemes compared to Rs 8,666.68 crore in August. Across categories, NFOs mobilised Rs 8,283 crore in September. Since March this year, equity funds have received a net inflow of Rs 68,551.24 crore. Among equity categories, multi-cap funds saw the biggest inflow of Rs 3,569.45 crore while sectoral and flexi-cap funds saw net inflows of Rs 2,000 crore each. Apart from ELSS, small-cap funds also witnessed outflows in September.
Aditya Birla Sun Life Mutual Fund (ABSLMF) has launched Aditya Birla Sun Life Nifty Healthcare ETF. It is an open-ended exchange-traded fund (ETF) that will track the Nifty Healthcare TRI. The New Fund Offer (NFO) opens for subscription on October 8 and closes on October 20. According to the press release, the Nifty Healthcare Index comprises a maximum of 20 tradable, exchange-listed companies and has a well-diversified sub-sector allocation. Apart from health care companies, the index includes companies from fields such as pharma, hospitals, medical devices and supplies, laboratories and diagnostics as well as medical insurance. The sub-sectors also include companies engaged in formulations, APIs, CRAMs and other healthcare services. The index is constituted on a free-float market capitalization method and is reconstituted semi-annually. This index has significantly outperformed the broader market indices in recent years.
Edelweiss Mutual Fund has converted two of its ETFs into index funds. Edelweiss Nifty 100 Quality 30 and Edelweiss Nifty 50 has been running like index funds from October 7. The schemes have no entry or exit load. The AUM of Edelweiss Nifty 50 index fund was around Rs 2.6 crore and Edelweiss Nifty 100 quality 30 index fund was around Rs 11.1 crore as in September 30. The fund house said that there was no large redemption from the funds during the cooling period. The fund house has put out a notice for the investors of these schemes for the change and given a cooling period of a month. With this change, Edelweiss Nifty 50 Index Fund's TER will change from 0.070% to 0.10 – 0.15% in direct and 0.45 – 0.50% in regular options. The fund house said that liquidity is the reason for the change in the scheme structures. Edelweiss Nifty 100 Quality 30 Fund's TER is 0.243% and now will be in the range of 0.25 – 0.30% in direct plan and 0.95 – 1.00% in regular plan.
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