In the week gone by, global stock markets moved higher as the Federal Reserve stated that it is in no rush to step away from its massive stimulus and this has eased fears of a sudden tapering in monetary stimulus. On the flipside, Fed Chair Jerome Powell has suggested an improvement in the employment numbers is the remaining major prerequisite for action. China's August PMI readings for both manufacturing and services disappointed investors, hurt by restrictions imposed to curb the COVID-19 Delta variant. Whereas Japan’s Caixin/Markit services Purchasing Managers’ Index came in at 46.7, against July’s reading of 54.9. Earlier this week, the official nonmanufacturing PMI for August showed contraction in the sector for the first time since early 2020.
Back at home, domestic markets moved higher on the back of upbeat Q1 GDP data and strong portfolio inflows. Besides, the global cues have also been supportive of the upwards move witnessed in the market. To note, India’s economy expanded at its fastest ever in the June quarter, helped by the low base of the year-earlier record contraction and a strong rebound in manufacturing and construction. Gross domestic product (GDP) grew by 20.1% for the April to June quarter compared to a year earlier. Going forward, it is expected that the risk of another wave of coronavirus infections and a sluggish vaccination programme may hamper the thrill. Another data showed that Fiscal deficit narrowed to a nine-year low of 21.3% of annual budget estimate as of July end at Rs 3.21 lakh crore, helped by a rise in revenues and decline in noninterest revenue expenditure. Meanwhile, India's output of eight core industries grew 9.4 per cent year-on-year (YoY) in July on the back of a low base as all sectors, except crude oil, registered an increase in output. On a month-on-month basis, output rose 5.4 per cent in July, after growing 1.5 per cent in June. Going forward, market will continue to take direction from the global as well as domestic factors.
On the commodity market front, CRB closed marginally low after solid gains in previous week. In the energy counter, crude prices were in range whereas natural gas surprised the market with its magical upside. Oil prices fell marginally after OPEC+ agreed to keep its policy of gradually returning supply to the market at a time when coronavirus cases around the world are surging, however it saw fresh buying later on. Crude may see a range bound trade between 4800-5300 levels. Bullion counter traded in a range with downside bias. Gold and Silver may trade in a range in 46500-48500 and 61500-64500 respectively going forward. Caixin’s August composite PMI, which includes both manufacturing and services activity, fell to 47.2 from July’s 53.1. Slowdown in China and weaker job data may keep a lid on the higher side of base metals. RBA Interest Rate Decision, GDP Growth Rate QoQ 3rd Est and ZEW Economic Sentiment Index, ECB Interest Rate Decision and ECB Press Conference of Euro Area, GDP Growth Annualized Final of Japan, BoC Interest Rate Decision, Inflation Rate YoY of China, Inflation Rate of Mexico and Germany, GDP of UK, Employment Change and Unemployment Rate etc are many triggers for the market; inflation and GDP data are expected to catch more attention.
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.
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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.
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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.
been able to offset a major part of it, some more pricing actions are being planned. It expects the business to bounce back strongly in the coming quarters.
The Company has a resilient business model with a diversified product portfolio and well-entrenched distribution network. The Company is driven by an experienced management team with deep understanding of business complexities and is wellpositioned to capitalize on the country's significant growth potential, with rising disposable incomes, young demographics and increasing awareness/ aspirations. Over time, V-Guard has scaled from a Kerala-based, single dimensional stabilizer brand to a strong consumer brand franchise with a wide range of products that has developed in line with evolving customer needs and aspirations. Thus, it is expected that the stock will see a price target of Rs.302 in 8 to 10 months’ time frame on an three year average P/BVx of 9.61x and FY22 BVPS (Book Value per Share) of Rs.31.38.
2020 quarter. From an operating loss of Rs 52.83 crore in Q1FY2020, the company reported Rs 86.53 crore operating profit in Q1FY2021. Its profit after tax was Rs 37.44 crore from a loss of Rs 56.73 crore in the June 2020 quarter.
According to the management of the company, growing architectural segment demand (e.g. housing project) where the strategy is to improve product mix with major capex completed and strong operating leverage is strengthening growth. Continuous launching of new products to stay relevant in the changing lifestyle and customer demands would drive its financial growth going forward. The government of India's PLI scheme is likely to boost automotive production. Along with it, a revival in real estate would augur well for Asahi India's revenue growth. Thus, it is expected that the stock will see a price target of Rs.429 in 8 to 10 months’ time frame on a current P/BVx of 6.17x and FY22 BVPS of Rs.69.51.
The stock closed at Rs 491.30 on 03rd September, 2021. It made a 52-week low at Rs 325.00 on 15th October, 2020 and a 52-week high of Rs. 494.00 on 03rd September, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 439.04.
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, the stock has formed a “Continuation Triangle” on weekly charts which is bullish in nature. Last week, the stock has given the pattern breakout along with high volumes and also has managed to close above the same so buying momentum may continue in coming days. Therefore, one can buy in the range of 480-485 levels for the upside target of 540-560 levels with SL below 455 levels.
The stock closed at Rs 558.15 on 03rd September, 2021. It made a 52-week low of Rs 364.10 on 13th October, 2020 and a 52-week high of Rs. 594.85 on 18th February, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 513.15.
As we can see on charts the stock is forming an “Inverted Head and Shoulder” pattern which is considered bullish. Last week, the stock also has formed a confirmation candle on weekly charts along with high volumes so follow up buying may continue in coming days. On the technical indicators front, RSI and MCD are also suggesting buying for the stock so one can initiate long in the range of 550-553 levels for the upside target of 600-620 levels with SL below 525 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
Nifty indices scaled to record highs in the week gone by and closed above 17300 mark for the first time. IT, FMCG, Metal and Energy counter provided support to markets while Auto counter remained laggard. Implied Volatility (IV) of calls closed at 11.55 % while put options closed at 12.42%. The Nifty VIX for the week closed at 14.24%. PCR OI for the week closed at 1.47. From the technical front, Bank Nifty has managed to give fresh breakout above key resistance level of 36400 levels which points towards more upside in upcoming sessions. On higher side, we expect Bank Nifty to move till 37000 levels from hereon. Derivative data also suggest that the bullish momentum will continue in upcoming week. Put writers were seen adding hefty open interest at 17200 strike while call writers held maximum open interest at 17500 strike.
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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 (Sep) are seen under pressure for the second consecutive week on steady demand and good progress in turmeric crop. We expect the prices to correct towards 7400 with immediate resistance at 8200 levels. Turmeric crop is in good conditions in all southern states and Maharashtra, thus expecting very bumper production next season. However, prices are still higher compared to last year, due to its medicinal and other immunity related benefits, the demand for turmeric has increased world over. In the first 5- months of 2021, turmeric exports are higher by 10% at 64000 tonnes as compared to last year same time period. Jeera futures (Sep) are trading in range after it touched 2-year high in August. But the prices have corrected due to heavy profit booking. Now expect to trade in a range of 14200 – 15000 as there is a sufficient stock with the traders and farmers due to higher production. The forecast of normal rains in Western region in September to November may support jeera sowing in Gujarat and Rajasthan. In 2021 (Jan- Jun), country exported more than 1.20 lakh tonnes of jeera compared to 90,000 tonnes last year same time. Dhaniya futures (Sep) after 4-weeks of uptrend we see weekly fall due to profit booking at higher levels. We expect the prices to trade lower towards 7700 levels with resistance at 8200 levels. Coriander prices remained stable in Jaipur and RamganjMandi of Rajasthan during last one week. It has touched season high of 8500 levels in spot markets in August but now buyers and spices millers are avoiding major purchases due to higher prices. Last month, prices have increased significantly due to dry weather in Gujarat and Rajasthan but with revival of monsoon rains, the fear of production loss in coming season have eased. An increase in export demand may keep the prices supportive.
Gold prices eased in range-bound trading as investors ignored a subdued dollar and squared positions with a focus still on Friday’s non-farm payrolls data that could determine the U.S. Federal Reserve’s tapering strategy. Gold investors seemed to take little notice of a dip in the dollar. Bullion typically gains on a weaker dollar as it makes gold cheaper for those holding other currencies. Market participants also took stock of data showing fewer Americans filed new claims for jobless benefits last week, despite a new COVID-19 infections surge. The data comes on the heels of the Jackson Hole annual Economic Policy Symposium, where Fed Chair Jerome Powell said the recovery in the labour market would determine when the central bank starts slowing its asset purchases. Gold is highly sensitive to any reduction in interest rates, which decreases the opportunity cost of holding non-yielding bullion. A strong recovery in the labour market is a crucial prerequisite for Fed's decision on tapering. Last week, Fed Chair Jerome Powell acknowledged in his remarks at the Jackson Hole symposium that tapering could begin this year, but it will remain cautious in its decision to raise interest rates. Indicative of sentiment, holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.2% to 1,000.26 tonnes, its lowest level since April 2020. Ahead in this week, we may continue to witness huge volatility and gold may trade with bearish bias where it could face resistance near 48500 and support is seen near 45500 whereas, Silver may trade in the range of 60200-65800. Whereas on COMEX gold may trade in the range of $1770-$1850 and Silver may trade in the range of $22.60-$26.90.
Soybean futures (Sep) have traded higher last week on improving demand. We expect the price to trade positive towards 9700 with support at 8250 levels. Despite revival of monsoon rains in the central and western India which improves the prospective of higher soybean production, the persistent demand is keeping the prices higher. As per SOPA press release Soybean area this season is at 123.5 lakh ha higher as compared to last year sowing area of 118.4 lha. Meanwhile, Govt also allowed import of 12 lakh tonnes of soybean meal to support poultry industry. RM Seed futures (Sep) closed higher for the 8th consecutive week and touched fresh all-time high of 8450 levels. We expect the prices to trade positively towards 8850 with support at 8100 levels. Lower stocks and continuation of consumption demand are supporting the price. Moreover, good domestic demand for oil and export demand for meal are expected to keep prices higher in coming weeks. In the physical market, processors are very careful in buying at high prices which may limit demand and put pressure on prices. We have seen some corrections in edible oil prices last week due to weakness seen in the International prices. In India, edible oil supplies are adequate due to higher imports and stagnant demand. Govt. has kept domestic tariff value unchanged for last 2-monhts on RSO and CPO. For cheaper imports, government announced cut in the import duty for Soybean oil and Sunflower oil to reduce domestic prices of edible oil. Ref Soy oil futures (Sep) are likely to trade in a range 1450 – 1400 with support and resistance 1350 and1433 resp. while CPO futures (Sep) are likely to trade with positive bias in the range of 1145-1200 levels.
Crude Oil prices were mixed on a weaker dollar and on a fall in U.S. crude stocks and were set for modest weekly gains ahead of a highly anticipated U.S. monthly jobs report. Both benchmark oil contracts jumped 2% on 02nd Sep and putting WTI on track to climb 1.8% for the week, while Brent headed for a 0.6% weekly gain. The move down in WTI was likely due to traders squaring positions ahead of the U.S. non-farm payrolls report for August, on worries the report may be weaker than consensus forecasts. The increase this week has also come amid a falling U.S. dollar, which makes oil cheaper in other currencies and the fallout from Hurricane Ida. The prolonged U.S. Gulf production and Louisiana refining capacity outages, which are bound to carve a bigger hole in the already diminished U.S. oil stockpiles, as well as data showing continued strong domestic fuel demand recovery, are supportive factors. Ahead in this week crude price may witness huge volatility within the range of 4700-5350, where buying near support and sell near resistance would be strategy. Natural gas futures soared in week as participants raised their bullish bets as seen by the open interest. Natural gas prices have recovered since Hurricane Ida. The temperature is predicted to stay warmer than normal and getting natural gas out of the Gulf will take time because the state’s electricity is out. A tropical depression has formed. Ahead in this week prices may trade within a range with positive bias where support is seen near 330 and resistance is seen near 350 levels.
Cotton futures (Oct) closed lower last week with good support at 24820 levels. We expect prices to trade sideways with positive bias in the range of 25500- 27000 due to good demand for new season cotton. We see resistance at 25600 levels. According to market sources, the recent rains in the kapas growing regions of Gujarat, Maharashtra and Madhya Pradesh will benefit the crop. The arrival of new kapas will increase in the mandis of many states from the next month. Therefore, the price of cotton is expected to remain stable in the producing states. The CCI is left with limited stock, so the corporation has kept sales rate unchanged. Guar seed futures (Sep) is currently trading at 7- year high due to expectation of good demand and lower production next season. We expect the prices to trade higher towards 6500 with support at 5670. There is expectation of rains in September which could increase guar production in Rajasthan but lower area is still problem. The production is expected to decline for the 4th consecutive year due to lower area and deficient of rains during initial period. The area under guar till August is 21 lakh hac Vs 25 l hac last year. The steady exports of guar gum and increasing domestic demand for Churi and Korma may keep prices above 5500 levels. Castor Seed (Sep) closed higher for 4th consecutive week. We expect prices to consolidate in the range of 5800-6350 levels. Rains have returned in Gujarat which will increase area and production of castor seed. Area under castor as on 31-Aug in Gujarat is lower at 4.26 lakh ha Vs 4.62 lh last year. Export demand and constant industrial use for castor oil will keep prices supportive over 5700 levels.
Base metals may trade in range with mix trends as factory activity lost momentum in most of Asia and Europe in August but accelerated in the United States and Canada. In China, manufacturing contracted for the first time in nearly 1-1/2 years while a steep decline in inventories available in the LME warehouse system may provide some support. Activity in top metals consumer China's services sector slumped into sharp contraction in August, as restrictions to curb the Delta coronavirus variant threatened to derail the recovery in the world's second-biggest economy. Copper may trade in the range 690-730 levels. Chile's state-owned copper producer Codelco has removed the threat of strike action by signing a final labor deal with the unions representing employees at its El Teniente division. Copper sales in Democratic Republic of Congo rose 10% in the first half of 2021 compared to the same period last year. Zinc can move in the range of 240-250. Lead can move in the range of 178-185 levels. Guangxi authorities issued a list of companies that should reduce production capacity in September, and companies with high power consumption are under full control. Nickel may trade in the range of 1400-1460 levels with bearish note. The stainless steel market has remained weak as anti-dumping expectations and lower guidance price by steel mills caused stainless steel prices to plunge. First-half nickel output from the Philippines, rose 39% from a year earlier. Aluminum may move in the range of 208-217 levels on supply disruption risks. Due to energy consumption control policy, China's Xinjiang region has imposed output limits on five aluminium smelters starting from this month as part of efforts to stamp out illegal production.
SILVER MCX (DEC) contract closed at Rs. 63285.00 on 02nd Sep’2021. The contract made its high of Rs. 73999.00 on 03th Jun’2021 and a low of Rs. 62010.00 on 20th Aug’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs 63814.03. On the daily chart, the commodity has Relative Strength Index (14-day) value of 40.818.
One can buy above Rs. 63900 for a target of Rs. 65500 with the stop loss of Rs. 63100.
NICKEL MCX (SEP) contract closed at Rs. 1439.30 on 02nd Sep’2021. The contract made its high of Rs. 1512.30 on 29th Jul’2021 and a low of Rs. 1320.90 on 02nd Jul’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1435.60. On the daily chart, the commodity has Relative Strength Index (14-day) value of 51.189.
One can buy near Rs. 1420 for a target of Rs. 1460 with the stop loss of Rs. 1400.
REF. SOYA NCDEX (OCT) contract was closed at Rs. 1387.60 on 02nd Sep’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. 1377.62. On the daily chart, the commodity has Relative Strength Index (14-day) value of 57.474.
One can sell near Rs. 1400 for a target of Rs. 1310 with the stop loss of Rs 1450.
CRB closed marginally low after a solid gains in the previous week. In the energy counter, crude prices dived whereas natural gas surprised the market with its magical upside. Oil prices fell after OPEC+ agreed to keep its policy of gradually returning supply to the market at a time when coronavirus cases around the world are surging. US Crude inventories fell by 7.2 million barrels to 425.4 million barrels for the week ending Aug. 27, bringing inventory levels to roughly 6% below the five-year seasonal average Natural gas futures surged to a fresh 52-week high and highest level since November 2008 on the MCX as participants raised their bets as seen by the open interest on solid demand for gas amid decline in inventories. Investment demand also rose in natural gas. Bullion counter traded in a range with downside bias. However, weaker than expected data capped the downside as a private payrolls report missed expectations. Silver performed better than gold. Most of the base metals ended lower on slower growth in manufacturing of most Asian and European countries, which fuelled market concerns over global economic recovery. Global factory activity lost momentum in August as the coronavirus pandemic disrupted supply chains, raising concerns faltering manufacturing would add to economic woes caused by slumping consumption. Aluminium rose despite the release of 70,000 mt of State Reserve Bureau aluminium ingot reserves will help fill in supply gap to a certain extent in the short term.
Cotton counter saw a fall. Recent rains in the kapas growing regions of Gujarat, Maharashtra and Madhya Pradesh will benefit the crop. The arrival of new kapas will increase in the mandis of many states from the next month. The CCI is left with limited stock, so the corporation has kept sales rate unchanged and thus the fall was limited. Guar seed tumbled due to profit booking on expectation of rains this week which could increase guar production area in Rajasthan. However, the steady exports of guar gum and increasing domestic demand for Churi and Korma to keep prices supportive. Castor was in range. Rains have returned in Gujarat which will increase area and production of castor seed. Area under castor as on 31-Aug in Gujarat is lower at 4.26 lakh ha Vs 4.62 lh last year. Revival of monsoon rains in the central and western India the prospect for soybean production becomes good however persistent demand is keeping the prices higher. In the physical market, processors are very careful in buying at high prices that limits demand and put pressure on the price recently. However, good domestic demand for oil and export demand for meal will keep prices higher in coming months. In India government announced cut in the import duty of Soybean oil and Sunflower oil to reduce domestic prices of edible oil.
Aluminum is the second most important metal after steel as it is widely used in the automotive, construction, aerospace industries and household appliances and utensils. So investors like aluminum as it is traded the most on the exchanges across the world. The upsurge in manufacturing ventilator led to a new segment demand of aluminium extrusions.
Aluminium prices hit their highest level in more than 10 years recently as smelters in top producer China faced tougher power controls, stoking supply worries for the energy-intensive metal. LME prices for the metal used in the aerospace industry and canned goods have risen almost 37% while in SHFE & MCX, the prices have risen 36% & 32% respectively in this year to date. Declining stockpiles of the metal at LME-monitored warehouses also provided the support. Earlier in the start of year, prices have been lifted not only by optimism over a vaccination drive that boosted a recovery in the global economy but strong consumption of aluminium in China as the country unleashed heavy stimulus spending.
Major factors of affecting the prices
Indian Rupee accelerated the gains in the first week of September after having recorded gains nearly 2% in the month of August after Fed step back to maintain hawkish stance at Jackson Hole last week. Additionally RBI’s intervention remains neutral around 73.00 in the wake of substantial liquidity as well as ease in inflation print. Going forward next week how US monthly payroll for August impact the dollar will guide the dollar-ruper pair. From the majors EURUSD is trending higher for the past two weeks after dropping to a low of $1.1665 mid-August. Similar reflection seen in EURINR which bounced-back from its latest low of 86.10. Euro got supported after Eurozone inflation figures came much higher than expected along with producer price Index for July was 2.3% MoM and 12.1% YoY compared to expectations of 1.8% and 11.1%, respectively. We think euro upside may get cap in the coming days notably against rupee. While the UK pound remains steady despite better-than-expected Nationwide House Price Index and Manufacturing PMI for August. Next week we can expect choppy move in both pound vs dollar and rupee as well.
USD/INR (SEP) contract closed at 73.2050 on 02-Sep-21. The contract made its high of 73.8000 on 30-Aug-21 and a low of 73.1075 on 02-Sep-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 74.1620.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 30.04.One can sell at 73.50 for the target of 72.50 with the stop loss of 74.00.
GBP/INR (SEP) contract closed at 100.9850 on 02-Sep-21. The contract made its high of 101.6250 on 30-Aug-21 and a low of 100.4650 on 01-Sep-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 102.2132.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 30.14. One can buy at 100.50 for a target of 101.50 with the stop loss of 100.00.
| 02nd SEP | China warns US that tensions threaten fight against climate change |
| 02nd SEP | US fleet managers seek out foreign truck drivers to solve labour shortage |
| 02nd SEP | Bond investors position for pullback in ECB support |
| 1st SEP | Spain boosts minimum wage as Covid revival gathers pace |
| 1st SEP | New BoE chief economist backs limits on quantitative easing |
| 1st SEP | Inflation puts pressure on America’s fast-expanding dollar stores |
| 31th AUG | Eurozone inflation rises to decade high of 3% |
| 31th AUG | UK consumer borrowing fell to zero in July as Covid cases climbed |
| 30th AUG | German inflation surges to 13-year high of 3.4% |
EUR/INR (SEP) contract closed at 86.7850 on 02-Sep-21. The contract made its high of 87.1475 on 30-Aug-21 and a low of 86.3125 on 01-Sep-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 87.5125.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 30.47. One can buy at 86.50 for a target of 87.50 with the stop loss of 86.00.
JPY/INR (SEP) contract closed at 66.6025 on 02-Sep-21. The contract made its high of 67.2550 on 30-Aug-21 and a low of 66.3525 on 01-Sep-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 67.4753.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 37.23. One can sell at 67.00 for a target of 66.00 with the stop loss of 67.50.
According to the industry report, 18 unicorn heavyweights like online education major Byju's, e-commerce giant Flipkart, digital payments leader Paytm, ridehailing app Ola, and hotel and room aggregator Oyo planning to tap the IPO market over the next 24 months. Then there are also players like online insurance retailer Policybazaar, furniture retailer Pepperfry, tech player Inmobi, online grocery delivery player Grofers, payment app Mobikwik, Saas-based solutions Freshworks, online fashion and apparel brand Nykaa, merchant platform Pinelabs that provides financing and last-mile retail transaction technology; pharma retailer Pharmeasy, online grocery delivery platform Delhivery; Droom, and Tracxn, among others, are set to hit the market over the next two years. Of these, Paytm (Rs 16,600 crore issue), Ola (Rs 11,000 crore issue on Monday), Policybazzar (filed for a Rs 6,000 crore IPO), Mobikwik (Rs 1,900 crore issue that opens next month), and Nykaa (Rs 4,000 crore) have already filed for IPOs earlier this month. The first startup to hit the market was food delivery platform Zomato that had raised Rs 6,300 crore last month.
Indian digital mapping firm MapMyIndia filed its DRHP documents on August 31, 2021. The initial public offering (IPO) will see an offer-for-sale up to 7,547,959 equity shares by selling shareholders, according to the draft red herring prospectus (DRHP). The selling shareholders include Rashmi Verma, and investors Qualcomm and Japanese map maker Zenrin. PhonePe holds 36.11 percent of equity shares on fully diluted basis and Zenrin invests 17.82 percent. Founders Rashmi and Rakesh Verma hold 17.66 percent and 14.11 percent in fully diluted stories, and Qualcomm's at 8.48 percent. According to the DRHP, the total Indian addressable market of digital maps and location-based intelligence services is expected to grow to $7.74 billion in 2025 at the CAGR of 15.5 percent CAGR from 2019 to 2025. The company registered Rs 192 crore in revenue for the year ending March 31, 2021, up from Rs 163.5 crore the previous year in FY20. The company’s profits doubled in FY21 to Rs 59 crore, from Rs 23 crore in FY20. MapMyIndia is one of the few profitable internet companies that are going for IPO. Other profitable companies that are going for IPO are Nykaa, and CarTrade, which was listed recently. After Zomato’s successful listing in July 2021, other companies that are looking at IPO include Paytm, PolicyBazaar, and Droom.
Veeda Clinical Research plans to raise Rs 500-Rs 700 crore from an Initial Public Offering (IPO) and offer for sale (OFS). The Ahmedabad-based Clinical Research Organisation, backed by private equity investor CX Partners, in June announced that it had raised $16 million from PE firm Sabre Partners and high networth individuals like Pranab Mody of JB Chemicals, Havells India family office, Nikhil Vora founder of Sixth Sense Ventures and Arjun Bhartia of Jubilant, among others.
Budget carrier Go Airlines, which has rebranded itself as 'Go First', has received market regulator Sebi's go-ahead for an initial public offer worth Rs 3,600 crore. The airline plans to garner up to Rs 3,600 crore through sale of shares, according to the Draft Red Herring Prospectus (DRHP). It also plans to raise up to Rs 1,500 crore by way of a pre-IPO (Initial Public Offer) placement. The carrier, which filed its preliminary papers for the IPO in May, received its observations on August 26, according to Sebi's latest update on processing status of the draft offer documents. The information was updated on August 27 and made public on Monday. In Sebi parlance, issuance of observations implies its go-ahead for the IPO. In June, Sebi had kept in abeyance the processing of Go Airlines' draft papers for the initial share sale. From the net IPO proceeds, the airline plans to utilise over Rs 2,015.81 crore towards pre-payment or scheduled repayment of all or a portion of certain outstanding borrowings, according to the DRHP.
The government has selected 10 investment banks including Goldman Sachs, Citigroup, and SBI Capital Market to handle the initial public offering of Life Insurance Corp of India. The government expects to raise Rs 80,000 crore-90,000 crore ($11 bln-12.2 bln) from its stake sale in Life Insurance Corp (LIC), as part of its plans to raise Rs 1.75 lakh crore from a privatisation programme in the current fiscal year ending in March 2022. LIC, India's biggest insurance company with assets of over 34 trillion rupees ($461.4 billion), has a subsidiary in Singapore and joint ventures in Bahrain, Kenya, Sri Lanka, Nepal, Saudi Arabia, and Bangladesh. Sixteen banks including seven global banks and nine domestic banks had been in the race to handle the IPO.
Cloud services and data center firm ESDS Software is likely to raise Rs1200-1300 crore through an initial public offering. The company is expected to file a draft red herring prospectors (DRHP) with the Securities and Exchange Board of India soon. Founded in 2005 by Piyush Somani, ESDS is into the business of cloud services, data center services, and product R&D across sectors. In 2015, the company raised $4 million in funding by the Canbank Venture Capital fund, followed by another round of stake sale in 2018 to South Asia Growth Fund and Global Environment Capital Company LLC. For the year ended March 31, 2020, the company reported a revenue of Rs 160.5 crore and operating profits of Rs 51.7 crore. Cloud services give companies of any size access to technological capabilities, previously accessible to large enterprises only. In India, the industry has gained momentum with more than 200 data centers and more than 10 cloud operators present. The company provides tailored solutions, including Small Industries Development Bank of India, Larsen & Toubro, Tech Mahindra, Vadilal, Symphony, NTT Data, Tata Capital, and MIDC. The company has built an end-to-end cloud platform and also provides cloud infrastructure as value addition. In the recent budget, the Government of India allocated $7.3 bn to the IT and telecom sector and provided tax holidays to the IT sector for Software Technology Parks of India and Special Economic Zones. The push towards cloud services has boosted hyper-scale data center investments, with global assets estimated US$ 200 billion annually by 2025.
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Mirae Asset Investment Managers has launched a New Fund Offer (NFO) for an exchange traded fund (ETF) that will invest in top 50 mega-cap companies of the US that are also part of S&P 500 index. Mirae Asset S&P 500 Top 50 ETF, an open-ended scheme, will track the S&P 500 Top 50 Total Return Index. The fund house also launched an NFO for a fund of funds that will invest in the ETF, enabling even those who don’t have a demat account to invest. While Mirae Asset S&P 500 Top 50 ETF will close on September 14, 2021, Mirae Asset S&P 500 Top 50 ETF Fund of Fund will close on September 15, 2021. The S&P 500 Top 50 Index captures several well-known sector leading companies from IT to healthcare, financials to consumer, energy to communication etc, having a total market cap of over $23 trillion. The top 10 constituents by index weight are Apple, Microsoft, Amazon, Facebook A class shares, Alphabet A and C class shares, Tesla, Nvidia, Berkshire Hathaway and JP Morgan Chase.
ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Alpha Low Vol 30 ETF FOF, an open-ended FOF investing in ICICI Prudential Alpha Low Vol 30 ETF. The New Fund Offer (NFO) opens on September 01 and closes on September 15. The benchmark for this FOF is Nifty Alpha Low Volatility 30 TRI. According to the fund house, through this FOF, investors can access a portfolio of stocks from various sectors, based on the top combination of alpha and low volatility. While investing through FOF, an investor without a Demat account too can invest in an ETF through lumpsum or SIP. The Nifty Alpha Low Volatility 30 index consists of 30 stocks selected from Nifty 100 and Nifty Midcap 50. The weights of the stocks are derived from alpha and low volatility factor scores with individual stock weight capped at 5%. The index methodology is factor weighted and re-balanced semi-annually. The top three sectors in the index are Consumer Goods (40.8%), IT (21.6%) and Pharma (16.8%). The index has outperformed the broad market indices 8 out of 11 times until 2020.
SBI Funds Management (SBI MF) will distribute the sixth tranche of over Rs 2,918 crore to unitholders of Franklin Templeton Mutual Fund's six shuttered schemes from September 1. After the payout, the total disbursement will reach Rs 23,999 crore, amounting to 95.18 per cent of assets under management (AUM) as on April 23, 2020, when the fund house announced to shut the schemes. Under the first disbursement in February, investors received Rs 9,122 crore, while Rs 2,962 crore were paid to investors in April, Rs 2,489 crore in May, Rs 3,205 crore in June and Rs 3,303 crore in July.
Kotak Mahindra Asset Management Company (AMC) has been barred from launching any new fixed maturity plan (FMP) scheme for the next six months, as per an order issued by the Securities and Exchange Board of India (SEBI) on August 27. The market regulator, which examined the case of delayed payments made in these six FMP schemes to their unit holders in 2019, has also decided to impose a fine of Rs 50 lakh on the company. The case pertains to six of the fund house's FMPs that were due for maturity in around April-May 2019. The fund house had failed to make full redemptions to its investors at the time of schemes' maturities because the said schemes had invested in Essel group companies (among other companies) and these companies had defaulted on their payments. Kotak AMC, in turn, did not pay its unit holders fully by the time the schemes came up for maturity. The fund house only paid the investors fully by September 2019. In short, the FMPs that were due for maturity in April-May, were in fact fully redeemed only in September of that year.
The cumulative three-month rolling net investment by domestic mutual funds in the secondary equity market rose to ₹32,169 crore in August 2021, the highest since March 2020, data from Sebi showed. The figures include exposure to index funds, exchange traded funds (ETFs) and balanced funds. This offset the moderation in the inflow from foreign portfolio investors (FPIs) who had a rolling cumulative investment of ₹7,489 crore during the period, according to the NSDL data. Local funds have been net buyers of equity in the secondary market in each of the past six months with a cumulative investment of around ₹42,944 crore. Inflow through systematic investment plans (SIPs) was ₹45,360 crore between March and July this year, reflecting no major lag between inflow and deployment. The gross purchase by domestic funds was at ₹85,555 crore in August. The ratio of gross purchase and sale was 115% compared with the long-term average of 106%. Net investment of local funds in the secondary market was ₹10,295 crore in August. There are 18 instances since 2008 on a monthly basis when the net investment crossed ₹10,000 crore. Total equity portfolio value of domestic funds rose by 52% year-on-year to ₹17.3 lakh crore in July following a sustained deployment and capital appreciation. Equity holding by local funds is 16.6% of the total institutional equity assets under management, the highest since June 2020, according to NSDL data.
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