In the week gone by, global stock markets witnessed a volatile trade as investors assessed/ looked concerned about the impact of interest rate hikes in the United States and other Western economies to cool surging inflation, as well as Russia’s war on Ukraine and a Chinese economic slowdown. In the recent released FED minutes, it indicates that members are hopeful they can bring down inflation, but also concerned about financial stability risks. In addition, Federal Open Market Committee members indicated that “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.”
Back at home, inflation continues to be a major concern. Weakening economic growth outlook globally, ongoing Russia-Ukraine situation, FPI selling, volatility in commodity prices and rising bond yields have spooked the confidence of the market participants. India’s monetary and fiscal authorities are finally acting mutually as spiking inflation is posing a threat to economic growth. To cool inflation heat, Government has cut excise duty on fuel (oil& gas), tweaked duty on raw materials. After banning the export of wheat in order to control rising inflation and amid growing international pressure to roll back the ban, government has brought another cap, i.e on sugar exports ; deciding on 10 MT of exports with special permission between 1 June to 31 October 2022. Besides, government has allowed duty-free import of crude soybean oil and sunflower oil. On the domestic front, the earnings season turned out to be mixed, in absence of any major positive surprise. With the US FOMC minutes out of the way now, the market is more or less getting prepared for the likely rate hike. It is expected that FED’s and RBI actions in June will be an important factor to watch. Besides, going forward, factors such as progress of monsoon, trend in global markets, the movement of rupee against the dollar and crude oil price movement, inflows and outflow of funds from foreign and domestic investors are expected to give direction to the market.
On the commodity market front, CRB traded near 2022 high as buying returned in commodities from lower levels. Fall in dollar index amid US treasury yield also made commodities more attractive. Crude oil is taking upside as summer driving season is ahead. U.S. Memorial Day weekend travel is expected to be the busiest in two years. Inventories also shed so expect marginal upside of 8700-8800 in crude, immediate support will remain near 8480. U.S. oil processing reached 93.2% of capacity last week, its highest since December 2019, as refiners maxed out fuel products to meet projected demand, which has sent gasoline to record highs above $4.50 a gallon and diesel to all-time highs of above $6. Bullion counter set for a second weekly gain after the dollar retreated from 20-year highs. The dollar, which normally moves inversely to gold, was continued a fall, and was set for a second consecutive weekly decline. U.S. Federal Reserve's aggressive monetary policy tightening plan is dimming bullion’s appeal and a rebound in equities also adding pressure. Personal Spending, Real Personal Consumption, Michigan Inflation Expectations, Michigan Consumer Sentiment, U.S. Baker Hughes Oil Rig Count Final etc are a lot of triggers scheduled for commodities in coming days.
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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 has strong balance sheet with very low debt. The new product launches, increases in government and private capex cycle would support growth going forward. The management of the company is expecting sustainable revenue growth. Moreover, with the stabilization of supply chain situation, the margins are also expected to improve as it has managed in the past. Thus, it is expected that the stock will see a price target of Rs.1219 in 8 to 10 months’ time frame on one year average P/Ex of 35.71x and FY23 EPS of Rs.34.13.
The company has strong track record on quarterly as well as yearly basis. According to the management, capacity addition across segments would boost revenue and profitability going ahead. The Central Government took number of initiatives to strengthen prospects of the country’s residential real estate sector; and Government push for the affordable housing is another big trigger for the company. It has strong financials with robust return ratios and it has under gone significant capex since last few years and able to maintain its operating cash positive. Thus, it is expected that the stock will see a price target of Rs.655 in 8 to 10 months time frame on a current P/Bvx of 7/.59x and FY23 BVPS of Rs.86.25
The stock closed at Rs 366.30 on 27th May, 2022. It made a 52-week low at Rs 274 on 08th March, 2022 and a 52-week high of Rs. 442.50 on 07th September, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 348.95
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, stock is also forming an “Inverse Head and Shoulder pattern on weekly charts, which is bullish in nature. Despite the volatility seen across the board, stock continued to hold its trend and give buy opportunity on dips with high volumes which indicates positive bias is aggressive for the stock. Therefore, one can buy in the range of 362-365 levels for the upside target of 410-425 levels with SL below 340 levels.
The stock closed at Rs 2742.10 on 27th May, 2022. It made a 52-week low of Rs 2159.55 on 08th March, 2022 and a 52- week high of Rs. 2994 on 27th September, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2569.61
As we can see on chart that stock is continuously trading in rising wedge on weekly chart which is bullish in nature. Apart from this, it is forming a “Symmetrical Triangle” on weekly charts and trading near on verge of breakout of pattern along with high volumes. Moreover, it consolidation from past few weeks indicates that there is a strong spurt in coming days. On the technical indicators front such as RSI and MACD, buying is suggested for the stock. Therefore one can buy in the range of 2730-2740 levels for the upside target of 2900- 2950 levels with SL below 2600 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 rebounded sharply last week, with banking index taking a lead from front as June series began on a positive note. Banking index witnessed gains more than 3.5% while Nifty also added 0.50% gains during the week. The sentiments remained in favor of bulls as global markets also seen recovering from its recent lows. From the derivative front, both call & put writers were seen adding hefty open interest at 16300 strike with open interest of nearly 39 lakh shares on the both side. Implied volatility (IV) of calls closed at 20.66% while that for put options closed at 21.87. The Nifty VIX for the week closed at 22.72%. PCR OI for the week closed at 1.38 lower than the previous week. Technically, Nifty has managed to close above its 20 days exponential moving average on daily charts, which is a positive sign for markets moving ahead. We expect Nifty to inch towards 16550 levels while 16100-16000 zone would act as a strong support for the index.
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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
Last week spices counter witnessed corrections for the second consecutive week due to physical demand from the exporters and local traders. Turmeric (Jun) ended in red last week and recorded its lowest price in 2022 as exports are not picking up while the domestic demand is normal. It has made firm support on the weekly charts near 7830 while the resistance is at 8400 levels. We expect it to trade sideways to higher, if it sustains above 8400 levels. Currently, turmeric sowing is going on in all south Indian states and progress is satisfactory. Turmeric prices have corrected about 17.5% in 2022 due to steady demand and sufficient supplies. As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15750 tonnes vs 12, 360 tonnes while in FY 2021/22, exports down 16.7% at 1.53 lakh tonnes as compared to the last year but higher by 10% compared with 5-year average.
Jeera (Jun) closed lower for the second consecutive week but signs of recovery is witnessed during the last two trading sessions. The support is seen at 21100 levels while resistance is at 22500 levels. We expect the prices to trade sideways to higher, if it sustain above 21890 levels. The export demand expected to improve after easing of supply chain disruption due to covid restrictions in China. Currently, prices are higher by 54.5% y/y on lower crop estimates. Traders expect jeera production in 2021/22 sharply lower at 5.0- 6.0 mln bags (1 bag = 55 kg) from 8.0-8.5 mln bags the previous year. As per govt data, jeera exports in Mar 2022 down by 58.5% Y/Y at 14600 tonnes compared to 35160 tonnes while exports for FY 2021/22 is also down by 27% Y/Y at 2.16 lt compared to 2.98 lt last year.
Dhaniya (Jun) slipped to 9-week low last week and took support near 10800 levels. We witnessed some recovery from the lower levels while the resistance seen at 11930 levels. We expect prices to trade sideways in the range of support and resistance due to balanced supply demand situation. Prices are down 10% in last one month due to slowdown in demand. The processors and traders are buying as per their requirements as market prices ruling higher by 55.4% y/y and up 25% since January due to lower crop estimates. As per govt data, coriander exports in Mar 2022 down 28.7% y/y at 4180 tonnes compared to 5862 tonnes last year while for FY 2021/22 export volume is down by 15.2% at 48,615 tonnes Vs 57,350 tonnes last year but 9.5% higher compared to 5-year average.
Gold was set for a second weekly gain after dollar retreated from 20-year highs. The dollar, which normally moves inversely to gold, continued its fall and was set for a second consecutive weekly decline. Gold has also witnessed some selling from higher levels as the U.S. Federal Reserve's aggressive monetary policy tightening plan dimming bullion’s appeal and a rebound in equities also adding pressure. The minutes from the Fed’s last meeting released earlier in the week, showed that it favoured additional 50 basis point rate hikes at its June and July 2022 meetings, as per expectations. U.S. Treasury yields were subdued, with the benchmark 10-year note hitting a fresh six-week low. Inflation fears continue to dissipate even as data and corporate announcements point to slower economic growth. The yellow metal is highly sensitive to interest rate hikes, as it increases the opportunity cost of holding non-yielding bullion. U.S. jobless claims fell last week, consistent with a labour market that remains tight amid strong demand for workers despite rising interest rates and tightening financial conditions. On the technical front, COMEX Gold is getting support near $1820 in near term whereas also facing resistance near $1880. Silver on COMEX is forming positive formations which suggest that it may target $22.80 with the support of $21.75. Ahead in the week MCX Gold may continue to trade higher where it may take support near 49800 levels and could face resistance near 52100 levels, buying near support advised. On the other hand, MCX Silver may continue to trade higher where it may take support near 60200 levels and face resistance near 64500 levels.
Oil prices hovered around a two-month high, with Brent crude on track for its biggest weekly jump in 1-1/2 months, supported by the prospect of an EU ban on Russian oil and the coming summer driving season in the United States. Momentum is flat-out bullish, with many factors pointing to a tighter market, even more so with the EU on the precipice of a total ban on Russian energy. Ahead of peak U.S. driving season, refined products remain in alarmingly short supply in the West, which should keep a high floor on oil prices through the summer. Both benchmark crude contracts were poised to end the week higher as the European Commission (EU) continued to seek unanimous support of all 27 bloc member states for its proposed new sanctions against Russia, with Hungary posing a stumbling block. A top Hungarian aide said the country needs 3-1/2 to 4 years to shift away from Russian crude and make huge investments to adjust its economy and that it could not back the EU's proposed oil embargo until there was a deal on all issues. Ahead in the week, price may continue to trade higher where it may take support near 8510 and could face resistance near 9000 levels. Natural gas flew above the $9 mark for the first time since 2008, stopping about 60 cents short of the minimum $10 level that bulls had been expecting this summer. Consistent trading above $9 will accumulate the momentum for further upside targets of $9.80 and $10.30 levels. Ahead in the week, prices may continue to trade with bullish bias where it may take support near 640 levels and could face resistance near 720 levels.
Base metals may trade in range with positive bias as easing COVID-19 restrictions in top metals consumer China lifted expectations of a recovery in demand, although worries about global inflation and an economic slowdown globally persisted after poor economic reading from major nations that may weigh on industrial metals demand. Profits at China's industrial firms fell at their fastest pace in two years in April as high raw material prices and supply chain chaos caused by COVID-19 curbs squeezed margins and disrupted factory activity. Pandemic-hit Shanghai, China's financial hub, unveiled more post-lockdown plans as it moves towards a return to normal, but a nationwide economic recovery is still a distance away. China's central bank said it would promote more credit for smaller firms and boost financial institutions' confidence to lend funds, as policymakers struggle to get the COVID-stricken economy back on track. Copper may trade in the range 755-795. The world refined copper market moved to a 25,000 tonne deficit in March from a 95,000 tonnes surplus in February, data showed. Aluminum may trade in the range of 233-255. Western European output of primary aluminium totalled 244,000 tonnes in April, down by 13.2% from last year, according to the latest assessment by the International Aluminium Institute (IAI). Zinc can trade in the range of 310-335 with positive bias. Lead can move in the range of 177- 189. Global refined lead output growth will slow from 3.2% in 2021 to 1.3% this year, according to ILZSG. Nickel may trade in the range of 2050-2200 levels. Russia's Nornickel expects a global nickel market surplus of 37,000 tonnes in 2022, lowering its estimate from its February forecast.
Cotton (Jun) closed lower for the second consecutive week due to pressure at higher levels as demand is stagnant at higher levels. Prices have corrected from higher levels as government hint on banning exports from the country. Now have the support at 45350 levels while resistance at 48450 levels. We expect it to trade sideways to lower towards 43500 levels, if it sustains below 45000 levels. The South India Spinners Association has taken big decision to close 100% mills and stop buying of cotton as cotton prices are higher by more than 107% y/y in view of production being lower than last year, rising demand and non-availability of quality cotton. Duty free imports decision and expectation of 15% increase in area of cotton in Northern India is pressurizing the cotton prices in recent weeks.
Guar Seed (Jun) closed in green last week but expected to face resistance near 6100 levels. On weekly basis, a good support is at 5950 levels and likely to trade sideways to lower towards 5700 if it sustains below the support levels. Currently, the prices are higher by about 43.6% y/y due to lower production, multi-year lower stocks and good export demand. The export of guar gum may support prices as number of operational oil-rigs improving in the US. The US oil-rig count is also higher at 576 up by about 220 compared to last year. In Mar 2022, Guar gum exports are higher by 9.4% y/y at 26377 tonnes while exports in 2021/22 up by 39% y/y at 3.21 lt compared 2.34 lt last FY. Guargum exports were down about 20% in last FY compared to previous five-year average of 4 lt exports.
Last week, Castor Seed (Jun) climbed to fresh all-time high of 7724 level due to persistent demand from the local oil mills. Currently it is trading at higher levels with support at 7400 while resistance at 7700. Currently, price jumped 30% this year while higher by 50.8% y/y due to lower production estimates. SEA estimates, India's castor seed crop in 2021-22 at16.94 lakh tonnes — lower by 62,000 tonnes from last year's estimated output of 17.56 lakh tonnes (lt). On the export front, castor meal and oil have done well despite prices have almost doubled compared to last year. Castor meal exports in first 4-months in 2022 down by 4.4% at 1.26 lt vs 1.31 lt. while castor oil exports are down 18% y/y to 1.95 lt during Jan-Apr Period.
Mentha Oil (Jun) slipped to 9-weeks low and witnessed second successive negative closing last week. We see support at 950 levels while the resistance is 1075 levels. The prices are expected to trade lower towards the support levels, if it sustains below the 1000 levels.
CRUDE OIL MCX (JUN)contract closed at Rs. 8872.00 on 26th May 2022. The contract made its high of Rs. 8932.00 on 27th May’2022 and a low of Rs. 7095.00 on 11th Apr’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 8423.81. On the daily chart, the commodity has Relative Strength Index (14-day) value of 64.117.
One can buy near Rs. 8850 for a target of Rs. 9100 with the stop loss of 8700.
ZINC MCX (JUN)contract was closed at Rs. 320.95 on 26th May’2022. The contract made its high of Rs. 370.80 on 22nd Apr’2022 and a low of Rs. 300.10 on 13th May’2022. The 18- day Exponential Moving Average of the commodity is currently at Rs. 322.90. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.758.
One can buy near Rs. 320 for a target of Rs. 340 with the stop loss of Rs 310
DHANIYA NCDEX (JUN)contract closed at Rs. 11012.00 on 26th May’2022. The contract made its high of Rs. 13290.00 on 07th Apr’2022 and a low of Rs. 10810.00 on 26th May’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs. 11535.32. On the daily chart, the commodity has Relative Strength Index (14-day) value of 40.624.
One can buy near Rs. 11100 for a target of Rs. 11800 with the stop loss of Rs. 10750.
CRB traded near 2022 high as buying returned in commodities from lower levels. Fall in dollar index amid US treasury yield also made commodities more attractive. The dollar index hit a nearly two-decade peak above 105 in mid-May, but signs that aggressive Fed action could already be contributing to slowing economic growth saw investors scale back tightening bets. U.S. Treasury yields also fell from multi-year highs. Investor risk appetite improved after the minutes from the U.S. Federal Reserve's last meeting confirmed the potential for a pause in rate hikes after two more half-point increases in June and July 2022. Crude prices reignited. U.S. crude stocks fell modestly in the most recent week, the government said on Wednesday, as refiners picked up the pace of activity, boosting overall capacity use to the highest levels since before the pandemic. As demand for gas rises, from increased power generation, reduced coal substitution, and accelerating exports, supply doesn't appear to be rising fast enough to keep up. Natural gas inventories are near their lowest seasonally-adjusted level in five years. It sent gas above $9. Gold was down on CME but silver gained marginally; here in India both closed in negative territory. Gold gave up its weekly gain on after minutes from a Federal Reserve meeting suggested the central bank would stick to raising interest rates by half a percentage point in the June and July meetings. Base metals closed in red, except zinc on concerns that slowing economic growth and COVID-19 lockdowns in top consumer China would depress demand. Europe's primary aluminium smelters are continuing to curtail production in the face of soaring energy costs. Western European output of primary aluminium totalled 244,000 tonnes in April, according to the latest assessment by the International Aluminium Institute (IAI). That was down by 13.2% on April last year. Indonesia is considering imposing an export tax on low content nickel products to encourage downstream investments. Indonesia, once a major nickel ore exporter, has stopped shipments of unprocessed nickel since 2020.
In agri, cotton rally paused for second week. Mentha oil saw sharp fall on dull spot demand. Guarex was in range with bearish bias. Plunging demand for soyoil in China is expected to cut consumption of the oilseed in the world's biggest user as lockdowns to prevent the spread of COVID have shuttered restaurants and canteens. India has no immediate plans to lift a ban on wheat exports, but will continue with deals which are done directly with other governments. India's palm oil imports could drop by nearly a fifth as now cheaper soyoil takes more market share, following Indonesia's curbs on palm oil exports and New Delhi allowing duty-free imports of soyoil. That shift could put pressure on Malaysian palm oil prices and may lift soyoil imports to record highs and support U.S. soyoil futures prices.
As the world is facing an uncertain time of food crisis due to global shocks such as conflicts in Ukraine and elsewhere, the pandemic’s disruption of livelihoods, market volatility from rising food and energy prices, and extreme weather caused by climate change, our farmers are proving most resilient with their hard work and have given us enough protection from the food crisis and have enabled us to supply food stocks to feed the world.
As per third Advance Estimates for 2021-22, the production of Foodgrains in the country is estimated at record 314.51 million tonnes which is higher by 3.77 million tonnes than the production of foodgrain during 2020-21. The production during 2021-22 is higher by 23.80 million tonnes than the previous five years’ (2016-17 to 2020-21) average production of foodgrains. Record output is also estimated for each individual crops such as rice, maize, gram, rapeseed and mustard and sugarcane during the 2021-22, agriculture ministry said in a statement.
The record production clearly outlines the tireless hard work & courage of farmers against rising cost of input and went out for higher sowing in the kharif and Rabi season as well as, research by agricultural scientists, and farmer-friendly policies of the Central Government. The government had gone for taking revolutionary steps to strengthen agriculture infrastructure and economic condition of the farmers.
As per 3rd Advance Estimates, the estimated production of major crops during 2021-22 is as under:
With record production continuously in the last 7 years, India has comfortable stocks of foodgrain that are not only providing confidence against the current global food crisis but the world is also looking towards India to fight the crisis. Though India has banned the export of wheat to avoid the hoarding of food grain by many countries, however, the government has promised the many countries to provide enough foodgrain on basis of government to government deals.
The Indian rupee held its ground near a lifetime low amid supported hawkish comments from RBI as well pullback in the dollar globally helped the rupee to defend the 78.00 levels. However, rising crude oil prices worsened the inflation and growth outlook for Asia’s third-largest economy. The Brent crude August contract inched higher in Asia to $114.30 per barrel, adding to yesterday’s near 3% advance. The rise in oil prices to their highest level in two months comes as India’s retail inflation rate is hovering just below 8%. Amid rising inflationary pressures, the country’s Monetary Policy Committee raised rates at an unscheduled meeting earlier this month and is poised to raise rates once again in June. Going forward next week it is expected that the modest weakness will continue unless brent does not surpass $120 as well. From the majors, the US dollar is poised to close in red for the second consecutive week for the first time this year amid Fed rate hike prospects fade. Meanwhile, the euro continued to scale higher amid unexpectedly hawkish comments made recently by ECB President Christine Lagarde this week about exiting from negative rates. While pound broke the key resistance levels of 97.40 vs the rupee which may lead the pair to 99.50 in the coming days.
USD/INR (JUN)contract closed at 77.5875 on 26-May-22. The contract made its high of 77.7750 on 23-May-22 and a low of 77.4700 on 25-May-22 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 77.5897.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 60.02.One can sell at 78.25 for the target of 77.25 with the stop loss of 78.75.
GBP/INR (JUN) contract closed at 97.8650 on 26-May-22. The contract made its high of 97.9100 on 26-May-22 and a low of 96.8625 on 25-April-22 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 97.4164.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 56.88. One can sell at 99.00 for a target of 98.00 with the stop loss of 99.50.
| 26th MAY | Fed considers ‘restrictive’ policy to fight inflation |
| 26th MAY | Fed officials raised possibility of ‘restrictive’ policy to fight inflation |
| 25th MAY | ECB warns a house price correction is looming as interest rates rise |
| 24th MAY | Growth in UK business activity falls to 15-month low |
| 24th MAY | UK public borrowing falls as economy bounces back from pandemic |
| 23th MAY | Joe Biden pledges to defend Taiwan |
| 23th MAY | Eurozone to end negative interest rates within months, Lagarde indicates |
| 23th MAY | Biden launches trade agreement with 12 Indo-Pacific nations |
| 23th MAY | IMF chief warns global economy faces ‘biggest test since second world war’ |
EUR/INR (JUN) contract closed at 83.1150 on 26-May-22. The contract made its high of 83.3850 on 24-May-22 and a low of 82.2450 on 23-May-22 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 82.7325.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 61.52. One can buy at 83.50 for a target of 84.50 with the stop loss of 83.00.
JPY/INR (JUN) contract closed at 61.1525 on 26-May-22. The contract made its high of 61.2800 on 26- May-22 and a low of 60.7125 on 24-May-22 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 60.8686.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 58.43. One can buy at 61.25 for a target of 62.25 with the stop loss of 60.75.
The Rs.808 crore-initial public offering of Aether Industries was subscribed 6.26 times on Thursday - the final day of bidding. The speciality chemical manufacturer received bids for 58.5 million shares against 9.35 million shares on offer. The qualified institutional buyer portion was subscribed 17.57 times. The portion reserved for non-institutional investors witnessed a subscription of 2.52 times. The retail and employee categories were subscribed 1.14 times and 1.06 times, respectively. The IPO consisted of a fresh issue of shares worth Rs.627 crore, and an offer for sale (OFS) of up to 2.82 million shares. The price band of the issue was Rs.610-642 apiece. The company will use Rs.163 crore out of proceeds from its fresh share issuance to fund the proposed greenfield project in Surat. It will use Rs.137.9 crore for the repayment or prepayment of borrowings, while Rs.165 crore will be partly used for funding working capital requirements.
Investors of Life Insurance Corporation of India (LIC) lost over Rs 50,000 crore on the stock’s debut on May 17. It listed at Rs 867.20 per share, an over 8.5 percent discount to its issue price, after the firm's initial public offering was oversubscribed nearly three times. The firm raised around Rs 21,000 crore and was valued at Rs 6.01 trillion at its upper price band of the issue of Rs 949 a share.
Three companies -- Federal Bank subsidiary Fedbank Financial Services, airport service aggregator platform Dreamfolks Services and speciality marine chemical manufacturer Archean Chemical Industries -- have received capital markets regulator Sebi's go ahead to raise funds through Initial Public Offerings (IPOs). Going by the draft papers, the IPO of Fedbank Financial Services Ltd (FedFina) comprises fresh issue of equity shares worth up to Rs 900 crore and an Offer For Sale (OFS) of up to 1,64,97,973 equity shares by Federal Bank and up to 2,92,16,313 equity shares by True North Fund VI LLP. The company proposes to utilise the net proceeds from the fresh issue towards augmenting its Tier - I capital base to meet its future capital requirements arising out of the growth of business and assets. Dreamfolks Services' IPO is entirely an OFS of up to 2,18,14,200 equity shares by promoters -- Liberatha Peter Kallat, Dinesh Nagpal and Mukesh Yadav. The public issue will constitute 41.75 per cent of the post offer paid-up equity share capital of the company. Archean Chemical Industries' IPO consists of a fresh issue of equity shares aggregating up to Rs 1,000 crore and an OFS of up to 1.9 crore shares by the promoter and investors, including the India Resurgence Fund, a joint venture between Piramal Group and Bain Capital.
Rustomjee group company Keystone Realtors is likely to file a draft red herring prospectus (DRHP) with the market regulator Sebi soon for an initial public offering of around Rs.1,000 crore. The company has recently raised Rs.170 crore through pre-IPO placement. The deal, according to the bankers, comprised 100% primary infusion and witnessed participation from HDFC Capital, IIFL Group, and the family office of Jagdish Master. The Rustomjee Group, which has a presence in the Western and Central suburbs of Mumbai, reported sales of Rs.2,680 crore during FY22. The group has a development portfolio of 20 million sq ft of completed projects, 9.2 million sq ft of ongoing development, and 16.4 million square feet of planned development across the Mumbai Metropolitan Region.
Go First, India’s No. 2 airline, is planning to raise 36 billion rupees ($464 million) through an initial public offering in July as air travel recovers from the pandemic. Go First’s share sale comes as air travel is rebounding in the South Asian nation driven by pent-up demand as people emerge from one of the world’s worst coronavirus outbreaks. India, the world’s fastest-growing major aviation market before the pandemic, expects local traffic to exceed pre-pandemic levels of 415,000 daily fliers within a year. Indian airlines are also adding capacity to capture a revival as international flights resume. Go First, previously known as GoAir, had obligations of about 81.6 billion rupees as of April last year, according to its draft preliminary prospectus. Go First, which ranks second after Indigo, expects to lose the No. 2 spot when Tata Sons Pvt. merges its airlines -- Vistara, Air India Ltd. and AirAsia India. Go First, which ranks second after Indigo, expects to lose the No. 2 spot when Tata Sons Pvt. merges its airlines -- Vistara, Air India Ltd. and AirAsia India.
Hospitality and travel-tech firm OYO is looking to launch its initial public offer after September and has written to stock market regulator Sebi, seeking to file updated and restated consolidated financial information. The company, which had filed preliminary papers with Sebi to raise Rs 8,430 crore through an initial share sale in October last year, is now prepared to settle for a lower valuation of around USD 7-8 billion against the USD 11 billion it was targeting initially, according to people in the know of the development. OYO's move to launch the IPO after the September quarter is mainly driven by the expectation of improvement in its financial performance and the current volatile nature of the market. It is understood that in a letter to Sebi, Oravel Stays Ltd, which runs OYO, has sought permission to include restated financial statements for the six-month periods ending September 30, 2022, September 30, 2021, and September 30, 2020.
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Riding on intense retail investors' interest and a sharp rally in equity markets, asset management companies (AMCs) launched 176 new fund offerings (NFOs) in 2021-22, garnering a whopping Rs 1.08 lakh crore. According to the data compiled by Morningstar India, there were 176 new fund offers (including closed-end funds and ETFs) in 2021-22. These managed to collect a staggering Rs 1,07,896 crore during their inception stage. This was way higher than 84 NFOs floated in 2020-21 and cumulatively, these funds were able to mobilize Rs 42,038 crore. Usually, NFOs come during a surging market when investor sentiment is high and optimistic. The stock market along with the positive investor sentiments kept surging post-March 2020, leading to the launch of higher number of NFOs. The NFOs were floated to capitalise on the mood of investors and attract their investment as they were willing to invest at that time. Coincidentally, over the same period, the Indian capital markets Sebi along with Association of Mutual Funds of India (AMFI) brought in considerable investor-friendly changes which included exit-load removal, entry-load capping, categorization and reorganization of mutual fund schemes, direct plans, risk-o-meter, addition of new category, Flexicap, and other policies, thus ensuing investor awareness and bringing about clarity and transparency in investments.
The newly-created flexi-cap category -- which requires mutual funds to invest at least 65 per cent of the corpus in equity without any restrictions on investing in large, mid or small-cap stock -- registered a net inflow of Rs 35,877 crore in 2021-22. This was the highest net inflow among the equity categories, data from the Association of Mutual Funds in India (Amfi) showed. Of the Rs 35,877 crore, flexi-cap funds saw a net inflow of Rs 2,478 crore in the three months ended June 2021, Rs 18,258 crore for the quarter ended September 2021, Rs 6,191 crore for the quarter ended December 2021 and Rs 8,950 crore for three months ended March 2022. While large-cap funds experienced a net inflow of Rs 13,569 crore for the entire 2021-22, inflow for mid-cap funds stood at Rs 16,308 crore and the same for small-cap funds was at Rs 10,145 crore. Apart from these, the multi-cap fund category witnessed a net inflow of Rs 28,095 crore and sectoral segment saw a net inflow of Rs 27,182 crore during the period under review. On the AUM front, the flexi-cap category has amassed assets of Rs 2,25,430 crore at the end of March 2022 through new realignment of funds and new fund launches. The flexicap category now has 17 per cent of the overall assets of open-end equity funds.
The Securities and Exchange Board of India has modified the “Categorization and Rationalization of Mutual Fund Schemes” to allow fund houses to launch passive equity linked saving schemes. Investors can now invest in passive tax saving scheme schemes to save taxes under Section 80C of the Income Tax Act. In a circular released on Monday, Sebi has said that mutual funds can launch either of the following ELSS schemes in the open ended scheme category, subject to compliance with guidelines on Equity Linked Saving Scheme, 2005 notified by the Ministry of Finance. The fund houses can either launch an active ELSS Scheme or a passive ELSS scheme (through Index Fund). The passive ELSS scheme shall be based on one of the indices comprising equity shares from top 250 companies in terms of market capitalization.
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