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Benchmark Sensex closed above the 73,000 level for the first time while broader Nifty scaled the 22,000-point peak on Monday as key stock indices stayed on the record-breaking run powered by a rally in IT shares, Reliance and HDFC Bank.

Rising for the fifth day in a row, the 30-share BSE Sensex jumped 759.49 points or 1.05 per cent to settle at a lifetime closing high of 73,327.94. During the day, it rallied 833.71 points or 1.14 per cent to hit an all-time intra-day peak of 73,402.16.

The Nifty climbed 202.90 points or 0.93 per cent to settle at a new closing high of 22,097.45. During the day, it zoomed 221 points or 1 per cent to reach a lifetime intra-day high of 22,115.55.

• Also read: Weekly Index Outlook | Nifty 50: Short-term outlook is bullish

A strong rally in IT shares Infosys, TCS, Wipro and HCL Tech after better than expected Q3 results helped the indices scale new record high levels. Oil & gas and energy sector shares also boosted the rally.

Among the Sensex firms, Wipro jumped over 6 per cent after the IT company’s December quarter earnings beat estimates.

The other prominent gainers were HCL Technologies, HDFC Bank, Infosys, Tech Mahindra, Bharti Airtel and Reliance Industries.

HCL Technologies on Friday reported a 6.2 per cent increase in consolidated net profit at ₹4,350 crore, highest ever on a quarterly basis, in the three months ended December 2023 on the back of growth in both services and software businesses.

Bajaj Finance, Bajaj Finserv, Larsen & Toubro, Tata Motors, Tata Steel and Axis Bank were among the laggards.

In Asian markets, Seoul, Tokyo and Shanghai settled in the green while Hong Kong ended marginally lower. European markets were trading mostly lower. The US markets ended on a muted note on Friday.

Global oil benchmark Brent crude declined 0.29 per cent to $78.06 a barrel.

Foreign institutional investors (FIIs) offloaded equities worth ₹340.05 crore on Friday, according to exchange data.

The BSE benchmark zoomed 847.27 points or 1.18 per cent to settle at 72,568.45 on Friday. The Nifty climbed 247.35 points or 1.14 per cent to settle at 21,894.55.

Benchmark equity indices reached historic highs in the early trading session on Monday, as the Sensex crossed the 73,000 milestone and the Nifty surpassed the significant 22,000-mark. The surge was attributed to a robust rally in IT stocks, with the 30-share BSE Sensex gaining 720.33 points to set a new record at 73,288.78. Meanwhile, the Nifty climbed 187.4 points, reaching an all-time high of 22,081.95.

Commenting on Nifty outlook, Anand James, Chief Market Strategist, Geojit Financial Services, said, “We will begin the week with expectations of 22240 or 22400 as the likely objectives. An interim rest point on the way up is 22013. Collapse theories are not strong now yet. Meanwhile, downside markers may be placed in the vicinity of 21835/790 for now.”

• Also read: Rupee rises 18 paise to 82.77 against US dollar in early trade

Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The rally in the market, primarily driven by momentum, is now getting support from fundamentals. The sharp bounce in large-cap IT stocks on the back of slightly positive management commentary indicates that an underperforming segment can surprise on the upside on news of a turnaround in the sector. The IT index which shot up by 5% on Friday will remain firm since HCL Tech and Wipro have more room on the upside.

He added that the nifty has broken out on the upside from the consolidation range and shows signs of further up move. “An important driver of the rally is RIL which is moving up on large delivery based buying on news of commissioning of the Dhirubhai Ambani Green Energy project in H2 of 2024. RIL, large cap IT and banking majors can provide fodder for the bulls in the near-term.“

ICRA Analytics commented that the key benchmark indices reached a fresh high, supported by buying across the sectors. “Information technology stocks contributed significantly to the gains after two index heavyweight leading IT companies posted better than expected Q3 earnings, which boosted optimism of better-than-expected results among the market participants for the remaining major IT companies,” added.

• Also read: DMart revenue up by 17%; stock rises

Stocks that were top gainers on the NSE were Wipro, Tech Mahindra, HCL Technologies, Infosys, and LTI Mindtree, while HDFC Life, Tata Consumers, Eicher Motors, Hindalco, and Bajaj Finance were top losers.

On the BSE, stocks advanced as of 10:08 am were 1,786 against 1,495 stocks that declined; 119 stocks remain unchanged. Total stocks traded were 3,400. The number of stocks that recorded a 52-week high was 354, and those that hit a 52-week low was 9. 

Target: ₹780

CMP: ₹682.90

Shyam Metalics and Energy’s (SMEL) Dec’23 volume stayed robust on finished steel front with revenue rate picking up.

Key points: Rebar shipments at 130kt rose to their highest-ever level for any month; pellet sales declined y-o-y and m-o-m, possibly due to lower spreads; Mittal Corp stainless steel plants continue to ramp up; and implied revenue rate is in excess of ₹1,220 crore per month now.

Going ahead, we believe revenue may be boosted by higher rebar sales (likely to stabilise at 1.8-2mtpa rate), ramp-up of stainless steel operations at Mittal Corp and (recently commissioned) sponge iron capacity.

That said, we trim our FY24E/FY25E EBITDA by 20/18 per cent, taking cognisance of adverse price- cost spread. Rolling over to FY26 earnings, we raise our target price to ₹780 (earlier ₹690).

We introduce FY26 estimates at this juncture when we expect contribution from additional revenue streams such as colour coated steel, pig iron and downstream steel products to lift EBITDA to ₹3,350 crore. Besides, the QIP proceeds worth ₹1,380 crore may sustain the net cash position of the company.

Key risks include: Higher-than-expected thermal coal prices, adverse pellet-iron ore price spread and delay in commissioning of capacities.

GHCL Limited’s shares were up by 2.17 per cent after the company  signed two Memorandums of Understanding (MOUs) during the Vibrant Gujarat Summit, outlining investments totalling Rs 3,450 crore in Gujarat. The MOUs were inked in the presence of the Chief Minister, Bhupendra Patel, his senior ministers, and GHCL representatives.

The first MOU involves an investment of Rs 2500 crore in the Kutch district of Gujarat. This funding will facilitate the second-phase expansion of the Greenfield Soda Ash plant and the establishment of a Vacuum Salt plant. The investment, spanning four years, is expected to generate direct and indirect employment for over 10,000 people.

The second MOU outlines a Rs 950 crore investment in Bhavnagar, situated in the Saurashtra region of Gujarat. The funds will be allocated to the mining of Bentonite and Sand, integral components found during lignite mining. Bentonite will be supplied to various industries, serving as a raw material for fertilisers, foundries, cosmetics, and pharmaceuticals, among others. Sand, another byproduct, will be utilized in the construction industry.

The company reported that its Khadsaliya Lignite mines in Bhavnagar recently received a “5-Star rating” from the Ministry of Coal, Government of India, in December 2023, making it the first lignite mine in Gujarat to achieve this distinction.

The shares were up by 2.06 per cent to Rs 607.95 at close on the BSE.’

Asian Energy Services Ltd clinched a contract from Eastern Coalfields Limited (ECL), a subsidiary of Coal India Limited. The contract entails the construction of plough feeders and associated civil works at the existing coal handling plant in Rajmahal, Jharkhand’s Godda district. The project is valued at Rs 21.9 crore, projected to be completed in 8 to 9 months.

The company informed, beyond its impact on the company’s financial outlook, the contract contributes to the nation’s overall growth trajectory in the energy sector.

Kapil Garg, MD of Asian Energy Services Ltd, said, “We are honoured to be selected by Eastern Coalfields Limited for this project. This undertaking strengthens our commitment to delivering high-quality services in the energy infrastructure domain. We look forward to executing the project efficiently and contributing to the development of the region’s coal handling capabilities. 

With this project, AESL is now executing 4 contracts in the infrastructure space and looking to add more such projects in the coming months. The upgradation and modernization of the energy and mineral logistics infrastructure are gaining momentum in India, and we are ready to take a substantial part in it.”

The shares were up by 2.37 per cent to Rs 276.95 at close on the BSE.

Veranda Learning Solutions Limited’s shares were up by 2.08 per cent after the company acquired a 50 per cent stake in Tapasya Educational Institutions Private Limited for Rs 120 crore. 

The company reported, the addition of Tapasya will enhance Veranda’s ecosystem, particularly in the Commerce Higher Education space. Veranda Learning aims to leverage Tapasya’s existing network, expanding offerings in competitive exams like CA while benefiting from regional expertise. On the other hand, Tapasya stands to gain from Veranda Learning’s experience in curriculum development, technology integration, and student support services.

The company informed, Tapasya Educational Institutions, established in 2009, operates 19 Inter/ PU Colleges and 10 Degree Colleges across 13 locations in Telangana and Karnataka, catering to over 13,000 students. The institution covers Intermediate, Pre-University, Graduation courses (B.Com and BBA), Professional Courses (CA and CMA), and Integrated programs. TEIPL is expected to generate a revenue of Rs 65 crore with an EBITDA of Rs 26 crores for FY24.

The shares were up by 0.57 per cent to Rs 317.45 at close on the BSE.

The Securities and Exchange Commission (SEC) on Friday charged investment banking major Morgan Stanley & Co. LLC and the former head of its equity syndicate desk, Pawan Passi, in a front-running case.

According to the US market regulator, the banking major and its employee were involved in a multi-year fraud by disclosing of confidential information about the sale of large quantities of stock known as “block trades.”

Penalty

The SEC’s order concerning Morgan Stanley finds that the firm wilfully violated Sections 10(b) and 15(g) of the Securities Exchange Act of 1934 and Rule 10b-5(b) thereunder, censures the firm, and orders it to pay approximately $138 million in disgorgement, approximately $28 million in pre-judgment interest, and an $83 million civil penalty. The SEC’s order concerning Passi orders him to pay a $250,000 civil penalty, and imposes associational, penny stock, and supervisory bars.

Morgan Stanley has agreed to pay $249.4 million imposed by the US regulator. The SEC also charged Morgan Stanley with failing to enforce its policies concerning the misuse of material non-public information related to block trades, the US securities regulator said in a release.

Block deals

A block trade generally involves the sale of a large quantity of shares of an issuer’s stock, privately arranged and executed outside of the public markets.

According to the SEC’s orders, from at least June 2018 through August 2021, Passi and a subordinate on Morgan Stanley’s equity syndicate desk disclosed non-public, potentially market-moving information concerning impending block trades to select buy-side investors despite the sellers’ confidentiality requests and Morgan Stanley’s own policies regarding the treatment of confidential information.

“Sellers entrusted Morgan Stanley and Passi with material non-public information concerning upcoming block trades with the full expectation and understanding that they would keep it confidential,” said SEC Chair Gary Gensler.

“Instead, Morgan Stanley and Passi abused that trust by leaking that same information and using it to position themselves ahead of those trades.”

According to the SEC, if Morgan Stanley eventually purchased the block trade, the buy-side investors would then request and receive allocations from the block trade from Morgan Stanley to cover their short positions. This pre-positioning reduced Morgan Stanley’s risk in purchasing block trades.

In a parallel action, the US Attorney’s Office for the Southern District of New York today announced criminal resolutions with Morgan Stanley and Passi. The SEC’s ordered disgorgement and pre-judgment interest for Morgan Stanley will be deemed partially satisfied by the forfeiture and restitution paid by the firm, which totals $136,531,223, pursuant to its criminal resolution.

Income-tax findings on an “unnamed” company perceived to be Polycab Industries and the company’s clarification failed to convince analysts. The Polycab stock corrected 21 per cent to ₹3,905 on Thursday because of a Ministry of Finance release suggesting tax evasion by the group.

While retaining the “Add” rating on the stock, Axis Capital cut the target price to ₹4,300 from its previous target of ₹5,809.

“We do not have sufficient information to decide: if tax evasion occurred?; time for final judgement if Polycab decides to contest the charges; scale of impact if tax evasion is proven (could be GST and IT evasion, and a penalty). But we believe a multiple derating is inevitable till the charges are proven otherwise,” said Axis Capital.

According to Anil R, Research analyst, Geojit Financial Services, the ongoing ₹1,000 crore tax evasion case involving Polycab awaits further clarity.

Amidst expectations of sustained volatility, there is an anticipation that the stock will underperform, he said, adding that regarding Polycab’s core operations, the robust performance in cable and wires was fuelled by strong volume growth, higher government spending, and a thriving real estate market.

“Looking ahead, despite a favourable demand environment, a moderated growth pace is foreseen due to factors such as higher interest rates, increased input costs, and intensified competitive pressures. On account of valuation concerns, we had recommended a sell rating with a target price of ₹4,473, which has been achieved.”

Meanwhile, SmallCap Fund Inc sold a 0.57 per cent stake or 8.51 lakh shares of the company through a block deal window at an average price of ₹3,599.87.

Axis Capital cut its target price to factor in the uncertainties due to the IT raid by cutting the target P/E to 30x Dec’25E (from 38x Sep’25E).

“We cut EPS estimates by 2-4% to factor in disruptions due to IT raid in FY24E and lower cables and wires margins as capacity is added in the sector in FY25/26E.”

In a late night “X” post, the income-tax department said it started search and seizure operations in Polycab and some of its distributors on 12 Dec’23 at more than 50 locations across Mumbai, Pune, Aurangabad, Nasik, Daman, Halol, and Delhi.

During the search, incriminating evidence was found and seized, revealing a modus operandi of tax evasion. Preliminary analysis suggests unaccounted cash sales, cash payments for unaccounted purchases, non-genuine transport, and subcontracting expenses to suppress taxable income.

Unaccounted cash sales of ₹1,000 crore (not recorded in the books), unaccounted cash payments of more than ₹400 crore made by a distributor on behalf of Polycab, and ₹100 crore of non-genuine expenses are some of the allegations. Cash exceeding ₹4 crore and more than 25 bank lockers have been put on restraint.”

In its response, Polycab said it’s yet to receive any communication from the income-tax department and denied any tax evasion and intends to appeal against the same if the charges are levelled.

Legal redressal and final judgment could take a long time in this scenario, cautioned Axis Capital.

Target: ₹362

CMP: ₹274.60

The successful debt restructuring at Vedanta parentco Vedanta Resources (VRL) removes a major overhang on the stock. The restructuring comes at a higher cost, but gives Vedanta a two-year breather to focus on ongoing aluminium/zinc capex and monetisation of steel & iron ore assets, which would unlock incremental cash flows.

VEDL has been performing well operationally, and even financially, and has not been in a distress situation. The real issue of the stock’s underperformance has been the continuous overhang of parentco’s debt, whose repayment has now been deferred to FY27.

• Also read: Vedanta joins International Aluminium Institute to strengthen sustainability efforts

The debt restructuring bolsters the case for ratcheting up Vedanta’s target valuation. We now value VEDL ex-HZ at 5.5x EV/EBITDA (earlier 4.5x) and HZ at 6.5x FY26E EV/EBITDA. Moreover, promoters still can offload up to 13.6 per cent stake to revert to 50.1 per cent stake in Vedanta, providing additional liquidity.

Monetisation of steel & iron ore assets, vertical split of businesses, etc can unlock even more upside potential. On the whole, we believe Vedanta is moving in the right direction. We upgrade to ‘Buy’ with revised target price of ₹362 (from₹265).

Benchmark equity indices climbed in early trade on Thursday amid a rally in global markets and buying in Reliance Industries.

The 30-share BSE Sensex jumped 341.76 points to 71,999.47 in early trade. The Nifty climbed 107.8 points to 21,726.50.

Among the Sensex firms, Axis Bank, Bajaj Finserv, Bajaj Finance, Reliance Industries, IndusInd Bank and NTPC were the major gainers.

Infosys, Nestle, Wipro and HDFC Bank were among the laggards.

Also read: Infosys Q3 results: 5 key things to watch out for

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading with gains.

The US markets ended in the positive territory on Wednesday.

“The Q3 results season starting today with the results of TCS and Infosys will provide indications of the Nifty earnings for FY24,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Also read: Parag Parikh Conservative Hybrid: Ideal fund for investing at market highs 

Global oil benchmark Brent crude climbed 0.39 per cent to $77.11 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,721.35 crore on Wednesday, according to exchange data.

The BSE benchmark ended 271.50 points or 0.38 per cent higher at 71,657.71 on Wednesday. The Nifty advanced 73.85 points or 0.34 per cent to 21,618.70.

After the successful venture into automobile sector, Sajjan Jindal-led JSW Group is preparing the ground for listing its cement business on stock exchanges to raise about ₹6,500 crore.

Sources said JSW Cement has reached out to domestic and foreign investment banks including SBI Capital, Kotak Mahindra Capital, JM Financial, DAM Capital, Jefferies, Citi and Goldman Sachs for advising the company on the proposed initial public offering.

The proposed IPO will also provide a partial exit for early private equity investors such as Apollo Global Management and Synergy Metals Investments Holding, the source added.

The company declined to comment on the development when businessline reached out.

In a first, after 13 years, the group recently listed JSW Infrastructure to raise ₹2,800 crore in September. The company’s shares, which was issued at ₹119 a piece, is currently trading at ₹215.

With the intense competition and consolidation in the industry, JSW Cement plans to utilise the IPO funds for expansion, debt reduction and working capital, sources said.

Soaring Demand

JSW Cement’s initial public offer will be the biggest in the construction material industry after Nirma group backed Nuvoco Vistas raised ₹5,000 crore in August, 2021.

Driven by JSW scion, Parth Jindal, JSW Cement has a capacity of 19 million tonnes per annum (mtpa) across its manufacturing units at Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha and Dolvi in Maharashtra.

The company, which is close to completing 2 mtpa of expansion, has an ambitious target to achieve 60 mtpa capacity in next 5 years through brownfield and greenfield expansion.

The soaring demand in the cement sector has forced leading players — UltraTech Cement and Adani Group companies Ambuja Cements and ACC — to consolidate their position through acquisitions.

UltraTech Cement, an Aditya Birla Group company, had made two acquisitions last November by buying out BK Birla Group company Kesoram Industries’ 10.75 mt cement capacity for ₹7,700 crore in all share deal and cement grinding assets of Burnpur Cement in Jharkhand for ₹170 crore.

Ambuja Cements recently acquired Sanghi Cements for ₹5,185 crore to take its capacity to 31 mtpa with six integrated cement manufacturing plants and eight cement grinding units across the country. Both Ambuja Cements and ACC plan to double their capacity 137 mtpa in next five years.

Benchmark equity indices declined in early trade on Wednesday amid fresh foreign fund outflows and a largely weak trend from global markets.

Investors preferred to stay on the sidelines ahead of the start of corporate earnings season and macroeconomic data announcements later this week, traders said.

The 30-share BSE Sensex declined 81.35 points to 71,304.86. The Nifty dipped 27 points to 21,517.85.

• Also read: Index Outlook: Sensex, Nifty 50: Resistances holding well

Among the Sensex firms, NTPC, Power Grid, Bajaj Finserv, State Bank of India, JSW Steel, Tata Steel, Larsen & Toubro and Axis Bank were the major laggards.

HCL Tech, Titan, Nestle, ICICI Bank, IndusInd Bank and Tata Consultancy Services were among the gainers.

In Asian markets, Tokyo traded in the green while Seoul, Shanghai and Hong Kong were quoting lower.

The US markets ended mostly lower on Tuesday.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹990.90 crore on Tuesday, according to exchange data.

Global oil benchmark Brent crude climbed 0.22 per cent to $77.76 a barrel.

The BSE benchmark ended marginally higher by 30.99 points or 0.04 per cent at 71,386.21 on Tuesday. The Nifty ended 31.85 points or 0.15 per cent up at 21,544.85.

Edelweiss Financial Services’ has announced a Rs 250-crore public issue of NCDs, with yield of up to 10.46 per cent per annum. The NCDs carry CRISIL A+/Stable and ICRA A+ (rating watch with negative implication). The issue, which will open on January 9 and close on January 22, offers ten series with fixed coupons and tenures ranging from 24 to 120 months.

At least 75 per cent of the funds raised will be used for repayment/ prepayment of existing borrowings, with the balance allocated for general corporate purposes not exceeding 25 per cent of the raised amount. Investors holding previously issued debentures/ bonds or equity shares of the company could receive an additional incentive of up to 0.20 per cent p.a. Trust Investment Advisors Pvt Ltd and Nuvama Wealth Management Ltd are the lead managers, and the NCDs will be listed on BSE Ltd for liquidity.

Nuvama Wealth Management Ltd, deemed an associate of the issuer, will market the issue without issuing a due diligence certificate.

The shares were down 0.17 per cent at Rs 78.57 at 12.24 pm on the BSE

Public sector companies or PSUs are an important resource for the Centre when it comes to fund raising but that is proving a Herculean task, especially from listed ones. By selling stake, the Centre achieves twin targets of meeting minimum public shareholding (MPS) norm for listed players and raising funds for its kitty.

According to current market regulator SEBI rule, companies have to mandatorily maintain the public shareholding of at least 25 per cent within three years of listing. Though PSUs are exempted from this now, public sector companies should voluntarily consider of meeting 25 per cent public norm, for better functioning of secondary market.

On most occasions, the Centre finds its difficult either on timing or on pricing front. Earlier, domestic institutions used to bail out the government on disinvestment and the vertical fall in the share price post the stake sale, left investors in the lurch.

Due to this conundrum, the union government not only failed to meet disinvestment targets (from listed entities) but also in achieving MPS. To facilitate MPS, the regulator, among the other frameworks, came out with offer-for-sale (OFS) mechanism to promoters. Just a day of notification is enough for promoters to announce the OFS. However, the stake sale through should be done in special window of the stock exchanges for two days (first day for institutions and the next day for retail investors).

This method has been fairly successful for many promoters, including the Centre.

LIC strategy

Amidst this background, the Centre, a few days back came out a heartening decision with respect to meeting the MPS for Life Insurance Corporation of India.

“The Department of Economic Affairs, Ministry of Finance vide Office Memorandum dated December 20, 2023 has decided in the public interest, to grant a one-time exemption to Life Insurance Corporation of India to achieve 25 per cent Minimum Public Shareholding (MPS) within 10 years from the date of listing i.e., till May 2032,” LIC says via a stock exchange filing.

The change of stance is welcome as it clearly reveals that “public interest” tops the Centre’s thinking.

Though most PSUs are turning profitable and paying hefty dividends back, the Centre may rethink on disinvestment altogether. Besides, in most companies that the Centre has already achieved MPS. However, in nearly two dozen listed companies that included LIC, General Insurance, IRFC, New India Assurance, MRPL, MMTC, SJVN, Punjab & Sind Bank, Indian Overseas Bank and NLC India, the Centre holds over 75 per cent.

For that, the government can consider selling stake in small dosages in the secondary market instead of OFS that often disrupt price movement of the stock, as it always comes with at least 5 per cent discount to the prevailing market price.

Government can take a leaf out of LIC strategy, which as investor in so many companies, offload them hassle-free.

For instance, a daily selling of one lakh shares of a company will cumulatively come to 2.5 crore shares in a year (given 250 trading days). It can sell one or more stocks at the same time this way. For most of PSUs, average trading volume is quite healthy of late at the bourses.

Selling of 2.5 crore shares of LIC even at the 52-week low price of ₹530 would fetch ₹1,300 crore to the government. As the average trading volume at the bourses is currently around 50 lakh shares, selling one lakh would not be that difficult.

Way forward

However, the department can strategically decide on the quantum, besides timing (i.e. daily, weekly or monthly) in the secondary market quietly based on market condition and liquidity of the particular stock.

The department can also actively pursue “block deal” mechanism, where it can negotiate with prospective buyers and offload even bigger chunk.

Of course, there will be operational difficulties, as monitoring of price movement and market condition must be done constantly which may require a special task force.

Thinking differently while selling stake, will help all stakeholders, especially the PSU, as wild swings in stock price are not good for any company.

India has toppled Taiwan to take the second place in the MSCI EM Index, with a weightage of 17.1 per cent. The country’s representation in the index is poised to top 20 per cent in the coming months, according to analysts, which could give a further fillip to overseas flows and cement the country’s place as an attractive investment destination among emerging markets.

India’s weightage in the MSCI EM index stood at 13 per cent in the beginning of last year, behind Taiwan (14.4 per cent) and China (33.5 per cent). The weightage had remained steady at around 8 per cent from 2015 to October 2020, implying a doubling in the last three years.

“The robust performance by Indian equities, particularly in the mid-cap segment, has led to numerous inclusions in every review. India’s move to a standardised Foreign Ownership Limit in 2020 and the relative underperformance by other EMs, especially China, has also helped India’s cause,” said Abhilash Pagaria, head of Nuvama Alternative & Quantitative Research.

FPI, EM portfolios

Foreign portfolio investors pumped in a record $20.7 billion into Indian equities last year. Part of the higher flows are an outcome of India’s rising weightage in EMs; with its neutral weight in benchmark MSCI EM seeing a 3.5 percentage points increase over the past six quarters, according to analysts. The Nifty returned 20 per cent last year, outperforming MSCI EM by 11 percentage points in dollar terms.

“The sectoral limit available to FPIs across sectors has increased over the years. Companies have been passing resolutions to raise FPI limits. A lot of new issuances and divestment by promoters has increased the free float of Indian companies, all of which may have contributed to the increase in its weighting,” said UR Bhat, director, Alphaniti Fintech.

India’s relative positioning in EM portfolios still remains light. Jefferies’ analysis of large EM active funds, for instance, indicates that India’s relative positions are much closer to neutral now as opposed to an average overweight of more than 2 percentage points. As such, the headroom for FPIs to take a larger overweight position on Indian equities could become an important driver for flows.

“Rising size is making Indian markets much more relevant for global mandated funds. Structural positives such as the expected political stability, rising investment cycle providing multi-year growth visibility and peaking dollar present ideal conditions for higher foreign flows,” said a note by Jefferies.

A recent white paper by Client Associates, a private wealth management firm, says that India merits significantly higher representation in both the MSCI EM and MSCI ACWI indices, given the country’s growing economic importance, attractive risk-adjusted returns and diversification benefits for investors.

A lower free float and market accessibility are the two chief reasons for the current under-representation. “Promoters’ significant equity holdings in larger companies limit foreign ownership and reduce accessibility for passive investors. Despite ongoing policy efforts like increased FDI limits and a unified FPI regime, India continues to score low on accessibility criteria within the MSCI framework,” the wealth manager observed.

3i Infotech Ltd has been recognised as a Representative Vendor in the 2023 Gartner Market Guide for Higher Education Student Information Systems. The company said the acknowledgment highlights the success of its NuRe Campus EdTech initiative, which focuses on delivering education management solutions through intelligent cloud-based automation. The platform covers all university processes such as application and admissions, to examinations and results.

3i Infotech invested in NuRe Campus to position itself in the educational Software as a Service (SaaS) ecosystem. The product has previously received acclaim as the best university management system in India. 

Thompson P. Gnanam, Managing Director & Global CEO, 3i Infotech said, “We are pleased to be recognised by Gartner as a Representative Provider in the higher education SIS market. Our core value lies in providing seamless digital transformation in all spheres of what we do and NuRe Campus has been our exceptional offering to promote the same in the education management industry. 

This recognition extends support and adds strength to our vision and endeavours as we tap the limitless potential of approaching modern-day complexities with cloud-first and edge-ready applications”.

The shares were down 1.52 per cent at Rs 54.25 at 10.47 am on the BSE.

Target: ₹1,400

CMP: ₹1,297.50

After underperforming its listed peers on pre-sales growth over FY21-23, we believe Sobha is set to outperform in terms of growth given its focus on unlocking its vast land reserve and exploring external growth opportunities through its healthy balance sheet.

The outperformance is also expected to be driven by improvements in profitability. Further, visibility in the monetisation of some of its large land parcels in Bengaluru will lead to a re-rating in its implied land valuation.

We factor in higher launches over FY24-26E and hence revise our pre-sales estimates by 4/12 per cent for FY24/FY25. We also introduce FY26 estimates.

We believe that as the company unlocks its vast land reserves and explores growth opportunities beyond its existing land bank, it will provide further growth visibility. Project launches on its large land parcels in Bengaluru and Tamil Nadu will drive re-rating for its existing land valuation.

Its focus on sustainable growth (revenue growth, healthy profitability, and steady cash flows) will put the company on a long-term growth path.

Key risks include slowdown in residential absorption, delay in monetisation of large land parcels, and inability to sign BD deals.

Equity markets opened in green on Thursday. The NSE Nifty was up by 0.42 per cent or 90.50 points to 21,609.20, while the BSE Sensex was up by 0.46 per cent or 326.25 points to 71,672.51 at 10 am.

A total of 2,233 stocks were  traded on the BSE, of which, 2,393 advanced, 729 declined and 111 stocks remained unchanged. As many as 269 stocks hit 52 week high and 5 stocks hit 52 week low. 

Avdhut Bagkar Technical and Derivatives Analyst at StoxBox, said, “The US market fell overnight to extend declines from the previous session as the latest Fed meeting minutes shed little light on when rate cuts might begin. US job openings eased in November to the lowest level since early 2021.” 

“Fewer workers voluntarily quit their positions, and the number of hires fell, adding to evidence of cooling labour demand. Meantime, the ISM’s US manufacturing gauge remained stuck in contraction territory for the 14th month at the end of 2023, restrained by weaker orders. Asian markets followed Wall Street lower this morning after the Fed signalled prolonged higher interest rates. 

The Indian market may open on a cautious note Thursday in the wake of weak global cues and a sharp overnight rebound in oil prices after four consecutive sessions of losses. With festival demand waning, the manufacturing sector slowed down in December, Purchasing Managers’ Index (PMI) dropping to an 18-month low of 54.9 in December as against 56 in November. However, the sector is still in expansion mode,” Bagkar added.

Also read: Jio Financial, BlackRock file papers with SEBI for MF business

He further said, “The 50 index witnessed a flattish opening, however, it succumbed to selling pressure immediately and continued its downward trajectory throughout the trading session. This was the second straight session of selling and with this the index added another distribution day in succession. Going forward, the index is anticipated to attract bullish strength on reclaiming the pivotal resistance near 21590.”

Major gainers on the NSE at 9:30 am include, Bajaj Finance (4.33%); NTPC (2.92%); Bajaj Finserv (2.23%); Tata Consumers (1.80%); Tata Motors (1.72%)

Major losers include BPCL(-1.66%); Bajaj Auto (-0.67%); Dr Reddy’s Lab (-0.52%); Eicher Motors (-0.43%); Tata Steel (-0.41%)

The board of PTC Industries on Wednesday approved preferential issue of up to 2.35 lakh shares to certain non-promoters at ₹6,000 each, aggregating up to ₹141.25 crore. Among the investors are Ashish Rameshchandra Kacholia and Himalaya Finance & Investment Co (one lakh shares each).

Shares of PTC Industries, after jumping to as high as ₹7,479.90, closed at ₹7,103.80, down 1.92 per cent over the previous day’s close on the BSE.

Domestic markets are expected to open on a negative tone on Wednesday amid weak global cues. Gift Nifty at 21,681 indicates a gap down opening of about 80 points as NIfty futures on Tuesday closed at 21,756.75 at the NSE.

Analysts said bulls need fresh triggers for both global as well as domestic markets as all the positives are already discounted.

• Buzzing stocks. Stocks that will see action today: January 3, 2024

The indices witnessed some pullback in Tuesday’s sessions as the IT and the banking heavyweights witnessed some selling pressure, said Ruchit Jain, Lead Research, 5paisa.com. However, the overall market was not very negative and certain sectors such as Pharma and Oil & Gas continued their upmove, he said.

“The overall data from the FIIs remain positive with minor unwinding seen, while in the options segment the put writers in the index had to cover their positions,” he added.

Asian stocks are down in early deals on Wednesday.

• Read:Stock to buy today: EIH (₹265.55): BUY

Mandar Bhojane, Equity Research Analyst, Choice Broking, said: “Analysing Open Interest (OI) data, the highest OI on the call side is noted at the 21,800 level, followed by the 22,000 strike prices. On the put side, the highest OI is observed at the 21,500 strike price. This data provides insights into the levels where options traders have the greatest exposure.”

Profit taking in banking, IT, auto and realty stocks took a toll on the markets, as expensive valuations prompted investors to pare their holdings, said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

“Besides, the ongoing conflict in the Red Sea has been making investors jittery as any flare-up in violence could trigger an upsurge in oil prices and weigh on the economy. The biggest negative catalyst: COVID-19 sub-variant JN.1 cases have seen a surge throughout India. Strictly speaking, if the last two days’ trading action on Dalal Street is any indication, then volatility could be seen going ahead,” he cautioned.

Mumbai-based Rays Power Infra, an integrated solar power company with implementation of solar power projects of 1,207 mega-watts peak, has filed its Draft Red Herring prospectus (DRHP) with capital market regulator SEBI to raise funds for its initial public offering (IPO).

The IPO with a face value of ₹10 comprises fresh issue of equity shares of up to ₹300 crore and an offer for sale (OFS) of up to 2.99 million shares by promoter selling shareholders. The OFS comprises up to 1.4 million shares by Ketan Mehta, up to 7.78 lakh shares by Pawan Kumar Sharma, up to 7.78 lakh by Sanjay Garudapally.

50 per cent for QIPs

The offer is being made through the book building process, where up to 50 per cent is reserved for qualified institutional buyers, 15 per cent for allocation to non-institutional bidders and not less than 35 per cent for retail investors.

The company in consultation with the book running lead managers, may consider undertaking a further offer of equity shares, including by way of a private placement of equity shares, aggregating up to ₹45 crore or a secondary sale by the promoter selling shareholders of up to 1.49 million equity shares or a combination thereof. If such placement is completed, the fresh issue size will be reduced.

The proceeds from the fresh issue, to the extent of ₹210 crore, will be used for funding incremental working capital requirement of the company and general corporate purpose.

Established in 2011, this company emerged as an early participant in the solar park sector and has since evolved into a reputable provider of comprehensive solar engineering, procurement, and construction (EPC) services. Its growth has been driven by the escalating demand for renewable energy solutions in the country.

BSE Sensex declined 0.38 per cent or 276.01 to 72,001 points, while the NSE Nifty was at 21,669.60, down by 0.28 per cent or 61.60 points in early trade. A total of 3,233 stocks were actively traded, 1,955 advanced, while 1,170 declined and 108 stocks remained unchanged. While 220 stocks hit 52-week high and 6 stocks hit 52-week low at 10 am on Tuesday.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “The 1,000 point rally in the Nifty in the last one month has imparted momentum to the market. Retail investors encouraged by the excellent returns of 2023 have turned exuberant and are chasing stocks, unmindful of the high valuations, particularly in the mid and small cap segments. Investors should not fall into the trap of ‘recency bias’ and chase low grade stocks in the broader market.

“Declining dollar and US bond yields provide a favourable global context for equities. FII inflows in 2024 are likely to be huge and have the potential to lift high quality large-caps, particularly in segments like banking where valuations are fair. An important trend to watch is the spike in the volatility index VIX to 14.5 which indicates that high volatility is round the corner. Yesterday’s sell off in the last 30 minutes is a warning that at higher levels there can be bouts of big selling.“

Major gainers on the NSE at 9:30 am include, Divi’s Lab (2.31%); Tata Consumers (1.75%); Dr Reddy’s (1.62%); Sun Pharma (1.33%); Cipla (1.17%)

Major losers include, Ultratech (-1.29%); Eicher Motors (-0.99%); M&M (-0.97%); Hindustan Unilever (-0.75%); Infosys (-0.73%).

New Delhi-headquartered Esconet Technologies has filed draft paper for listing at NSE Emerge. The IPO comprises a fresh issue of 33.60 lakh shares.

The company manufactures high-performance supercomputers, data servers and workstations, besides offering a wide range of IT solutions for SMEs, large organisations and public sector clients, such as data storage and networks, security, virtualisation and data protection

The company plans to use ₹16 crore from IPO proceeds to fund its long-term working capital requirements and ₹2.5 crore to invest in its wholly owned subsidiary ZeaCloud Services Private Ltd to fortify data backup capabilities.

The Securities and Exchange Board (SEBI) of India has imposed a penalty of ₹1.2 crore on Unitech Advisors (India) Pvt Ltd (now known as Auram Asset Management Private Ltd) and two of its directors, Ajay and Sanjay Chandra, for failing to wind up three real estate funds years ago, despite several extensions.

Besides, the market regulator in a late night Friday order also imposed a penalty of ₹10 lakh on Sanjay Chandra, Hitendra Malhotra, another director of the company, and Deepak Bajaj, a director at Unitech Realty Investors (India) Pvt Ltd and a nominee of Unitech Advisors on the investment committee of the fund house. That means, the total amount should be paid jointly and severally by them would be ₹1.20 crore, said SEBI.

SEBI has found a number of violations by the fund house including investing investors’ monies in its group companies, made bad investment decisions, and still not returned the money of a majority of its investors.

Also read: Not just equities, CY23 was good for gold, real estate and bitcoin investors

They have also been barred from accessing the securities market either directly or indirectly for two years. Besides, these individuals have been barred associating themselves, directly or indirectly, with any SEBI registered intermediary, including SEBI registered funds such as Mutual Funds, AlternativeInvestment Funds, Portfolio Management Services, etc. which deal with investors’ money in any manner for two years.

A further penalty of ₹10 lakh (also to be paid jointly) has been imposed on Hitendra Malhotra and Deepak Bajaj for failure to redress investors‘ grievances.

Also read: Index Outlook 2024: Sensex, Nifty 50: Rally to fizzle out in 2024 

SEBI has also slapped a penalty of ₹10 lakh each on the fund house’s three trustees Vijay Tulshyan, Mahesh Kumar Sharma and Rakesh Dhingra. They were barred from taking new assignments as Trustees of Alternative Investment Fund of any category for a period of one year, SEBI order said.

“The direction for winding up and for providing exit to investors/unit holders does not preclude the investors/unit holders of the fund to pursue other legal remedies available to them under any other law, against the fund and/or the Noticees regarding their investment or deficiency in service before any appropriate forum of competent jurisdiction,” SEBI further said.

As infrastructure and its many sub-segments took off sharply over the past couple of years and continue to thrive with heavy government investments and initiatives, many companies have benefitted from smart execution of such projects.

In this regard, NCC is a company that has been a key beneficiary of the focus on improvement in infrastructure across the country.

The firm operates in segments ranging from building & housing, roads, water & environment, to irrigation, electrical works, mining and railways. These projects are executed for various State and Central government entities.

A track record of strong execution, diversified orderbook and a pipeline of lucrative projects to be worked on over the next few years make the prospects for the stock of NCC attractive.

The shares of NCC have doubled over the past one year, but are still reasonably valued. At ₹166.70, the stock trades at 18 times its trailing 12-months per share earnings and 14 times its likely per share earnings for FY24. Investors with a 2-3-year perspective can buy the shares of NCC.

In the last five financial years (FY18-FY23), the company’s revenues have risen at a CAGR (compounded annual growth rate) of 12 per cent to ₹13,351 crore in FY23, while net profits grew at 14.7 per cent over the same period to ₹569 crore.

Strong execution record

NCC operates in multiple segments of the infrastructure theme, as mentioned earlier.

Industrial and commercial buildings, IT Parks, shopping malls, colleges, hospitals, metros, highways, water treatment plants, underground drainages, electrification, transmission & distribution lines and sub-stations, dams, reservoirs, tunnels, track-laying, signalling and coal excavation are some of its areas of expertise.

A sample of its projects executed includes, Nagpur Metro Rail, ESIC Hospital at Gulbarga, AIIMS Guwahati, Agra-Lucknow Expressway, SVAB, ISRO Sriharikota, Water Supply Project in Odisha, Rubber Dam on Falgu River, Airport at Agartala and Nagpur-Mumbai Expressway, among many others.

NCC is currently executing or has won orders from North Bihar Power Distribution Company, Brihanmumbai Municipal Corporation, Maharashtra State Electricity Distribution Co., Navi Mumbai International Airport, Haryana International Horticulture Marketing Corporation and the like. The size of these orders ranges from ₹1,144 crore to ₹5,755 crore, indicating deep client relationships. The UP Jal Jeevan Piped Water project is worth ₹16,500 crore.

Large, diversified order book

The company has witnessed a surge in its order book over the past couple of years. In the recent couple of quarters alone, it has won a total of over ₹20,400 crore worth of orders.

As of September 2023, NCC had an order book of a staggering ₹61,796 crore to be executed in the next few years. The order book translates to around 4 times its trailing 12-months’ revenues.

Being an EPC (Engineering, Procurement and Construction) player, the company is able to bid smartly for its projects and has generally been able to maintain an EBITDA (Earnings before interest, taxes, depreciation, and amortisation) margin of 10 per cent or more. This margin is healthy given the scale at which it operates. NCC is also increasingly taking on projects that contain escalation clauses to insulate the company from increase in input prices.

The company has constantly been able to tap into emerging areas and develop expertise to win orders. Smart metering is one such area, given the focus that many State electricity boards put into it to reduce revenue leakages and tighten subsidies.

NCC’s current order book is quite diversified with buildings (41 per cent), transportation (14 per cent), electrical (22 per cent), water & railways (16 per cent) and mining (7 per cent) being the main constituents.

Given the diversity of the order book, and the criticality of many projects that it is executing, there is considerable visibility on earnings and margins for the next few years without any fears of cutbacks from governments.

Debt and one-offs

Despite growing at a reasonable pace and with a fairly large scale of operation, NCC has managed to keep its debt level under control. Gross debt has decreased from ₹1,985 crore as of September 2022 to ₹1,470 crore as of September 2023. The company has cash and cash equivalents of ₹215 crore as of September 2023.

Though NCC has indicated that debt may go up a tad over the next couple of quarters, the levels of leverage are still comfortable.

The net debt to equity ratio is a little over 0.1, which is quite a healthy level to operate at.

In the first half of FY24, NCC’s revenue rose 36.2 per cent over the same period in FY23 to ₹8,121.5 crore, while net profits declined 4.3 per cent to ₹2,31.3 crore. The reason for the decline was a one-off arbitration issue.  In September 2023, NCC received an arbitration award of ₹198 crore after five years (from a client, Sembcorp), while the expected claim was ₹606 crore. At the same time, the company also received a claim settlement of ₹152 crore from NHAI. These two claims together impacted revenue by ₹199 crore and net profits by ₹149 crore in Q2FY24 as impairment — no cash outflows, though. Otherwise, the first half net profits would have soared sharply.

Long-term investors can buy the shares are Jubilant Pharmova (₹545.75) at current levels. The stock made a low of ₹268.60 in March and has risen well from there. It indicates that the downtrend has reversed. This rise from the above mentioned low has happened from a strong long-term trendline support. This also strengthens the case for a trend reversal. Immediate support is at ₹480. Below that ₹350-280 is a broad support zone. Looking at the big picture, Jubilant Pharmova share price can target ₹950-1,050 over the next one-two years. Investors with a minimum time-frame of one year can buy Jubilant Pharmova now. Accumulate on dips at ₹490. Keep a stop-loss at ₹285 initially. Trail the stop-loss up to ₹590 as soon as the stock moves up to ₹780. Move the stop-loss further up to ₹820 when the price touches ₹880. Exit the long positions at ₹950.

Life Insurance Corporation of India’s has reduced its shareholding in Bharat Heavy Electricals Ltd to 9.617 per cent from 11.701 per cent.

In a disclosure to the exchanges, LIC said it sold the shares at an average price of ₹79.58 through secondary market between June 2019 and December 2023.

While shares of BHEL closed 0.44 per cent higher at ₹193.45, that of LIC edged up 0.79 per cent at ₹833.30 on the BSE.

Target: ₹3,700

CMP: ₹3,133.70

The company reported a robust growth outlook across all segments, resulting in strong earnings visibility from FY23 to FY26. The revenue contribution from the Railway and Mobility (R&M) division, which yields higher operating margins, is increasing. This is expected to improve the company’s operating profits moving forward.

In FY23, its R&M division contributed 11 per cent to total revenue and we expect this segment to further increase its pie to 16 per cent by FY26.

We model Revenue/Operating Profit/PAT CAGR of 15/23/34 per cent over FY23/26E. We have increased our revenue and operating margin estimates backed by strong revenue visibility from its strong order book. Moreover, its value-added products and operating leverage in its R&M Division will result in an improvement in profitability y-o-y.

We currently have a Buy rating on the stock with a revised TP at ₹3,700/share. Our recommendation is supported by robust order booking its Railway Sub-systems & Mobility Division, increasing value-added products, improving operating leverage resulting in improving ROE and ROCE (to 15 per cent and 16 per cent respectively) and operating margins (by 130 bps to 7.3 per cent) by FY26.

The Friday morning market opened with a decline, following the positive start earlier in the week. NSE Nifty was down by 0.21 per cent, or 46.55 points, at 21,732, while the BSE Sensex was at 72,229.87, down by 0.24 per cent or 178 points.

A total of 3,089 stocks were actively traded, with 1,852 advancing, 1,145 declining, and 92 remaining unchanged at 10 am on Friday. Additionally, 169 stocks reached a 52-week high and 10 stocks reached a 52-week low.

Makarand M Joshi, Founder of MMJC & Associates, a corporate compliance firm, shared insights on the Consultation Paper on Amendments to SEBI Regulations regarding the verification of market rumours. He clarified, “SEBI’s proposal on the verification of market rumours would help bring parity to the markets. The new initiative, primarily aimed at price protection, introduces a mechanism to mitigate the impact of speculative rumours or media discussions on stock valuations before official company announcements.”

• Also read: Index Outlook: Nifty 50, Sensex: Uptrend is intact

SEBI’s proposals ensure that if market movements are influenced by unofficial information, the period during which this information is confirmed by the company will be excluded from the share valuation formula. 

Essentially, what began as a measure for rumour verification and investor protection has evolved into a complementary framework certifying the legitimacy of market deals. These proposals by SEBI would help curtail mischiefs played with respect to market rumours.”

Top gainers on the NSE at 10 am include Tata Consumer Products Ltd (3.23 per cent), Tata Motors Ltd (2.14 per cent), Eicher Motors Ltd (1.22 per cent), Maruti Suzuki India Ltd (0.70 per cent), and Sun Pharmaceutical Industries Ltd (0.42 per cent).

Top losers on the NSE at 10 am include Bharat Petroleum Corporation Ltd (-2.22 per cent), Kotak Mahindra Bank Ltd (-0.90 per cent), State Bank of India (-1.03 per cent), Apollo Hospitals Enterprise Ltd (-1.02 per cent), and Power grid corporation of India Ltd (-0.96 per cent).

The BSE SmallCap was up by 0.31 per cent and the MidCap was up by 0.22 per cent, indicating gains.

Target: ₹635

CMP: ₹ 562.15

We met Sushanth Pai, Chief Financial Officer, Matrimony.com (Matrimony).

Takeaways: 10–12 per cent revenue growth (volume led) is possible in the future and will be driven by new initiatives like ‘Jodii’ and the launch of a ‘serious relationship’ platform; Marriage service could breakeven on a cash-basis by Q4-FY24 and Matrimony is working on improving the product; In case there is consolidation in the matchmaking industry, Matrimony.com will be only open to be an acquirer should an opportunity present itself; and The legal disputes with Google are likely to continue in the near term, which will result in fresh provisions every quarter.

To achieve double digit growth, a lot of initiatives have been taken and they have focussed on continuous innovation.

As a market leader in the matchmaking space (over 60 per cent share), they will continue to raise the issue of high service fee in relevant forums. Maintain ADD with a TP of ₹635.

Key risks: Weaker-than-expected conversion of active profiles into paid subscriptions; slower-than-expected scale-up in marriage services; and lowerthan expected recovery in the matchmaking business.

Shares of Hyderabad-based Azad Engineering will be listed on the bourses today. The company, whose IPO saw an overwhelming response from all category of investors, has fixed the issue price at ₹524, at the upper end of the price band of ₹499-525. The IPO was subscribed over 83 times.

The ₹740-crore IPO from Hyderabad-based Azad saw the quota set aside for retail investors receiving bids 24.51 times, while that for non-institutions was 90.24 times. The QIBs portion was subscribed a whopping 179.64 times. The issue also has a reservation for employees and thier quota was subscribed 14.71 times.

Several sports personalities including Sachin Tendulkar, PV Sindhu, VVS Laxman, and Saina Nawal, had invested in the company.

Issue details

The initial public offering comprised a fresh issue of ₹240 crore and an offer-for-sale of ₹500 crore by promoters and external investors, including Piramal Structured Credit Opportunities Fund and DMI Finance.

Anchor investors

Ahead of the IPO, the company had mopped up ₹220.80 crore from anchor investors, including Nippon Life India, Abu Dhabi Investment, ICICI Prudential, Nomura, Ashoka India Equity, Kotak Mahindra Mutual, Tata Infrastructure Fund, Bandhan Infrastructure Fund, Edelweiss Mutual, HDFC Life Insurance, Bajaj Allianz, Max Life Insurance, and Eastspring Investment India.

The company proposes to utilise the proceeds from the offer to partially fund capital expenditure for its ₹280 crore expansion by setting up two units towards the end of the next fiscal and for repaying/pre-paying debt of around ₹90 crore.

Investors to remain stay invested

Even after the IPO, the company will continue to have external investors in the form of HNIs (High Networth Individuals), including sports stars like Sachin Tendulkar, VVS Laxman, PV Sindhu, and Saina Nehwal. Together, these HNIs and the employees will own around 12 per cent of the firm.

About Azad Engineering

Azad Engineering is a niche manufacturer of product lines in aerospace and defence, energy, and oil and gas industries. It manufactures highly engineered, complex, and mission and life-critical components. Some of its key products include 3D rotating air-foil portions of turbine engines and other critical products for defence and civil aircrafts, spaceships, defence missiles, nuclear power, hydrogen, gas power, oil, and thermal power.

In the energy space, the company boasts international clients such as Siemens Energy, General Electric, Honeywell International, Mitsubishi, Eaton Aerospace and MAN Energy Solutions.

Merchant bankers to the issue are Axis Capital, ICICI Securities, SBI Capital Markets, and Anand Rathi Advisors.

Shares of RBZ Jewellers closed 5 per cent higher on listing day after opening on a dull note. The stock closed at ₹105 against the IPO price of ₹100 on the NSE, after moving between ₹96 and ₹105. On the BSE, it closed at ₹104.99.

The ₹100-crore initial public offering from RBZ Jewellers came out with a price band of ₹95-100 and was subscribed 16.86 times, mainly thanks to retail investors, whose portion received bids for 24.74 times.

The offer, a fresh issuance of one crore shares, is being made to finance the working capital requirements and for general corporate purposes from the Jaipur-based company.

Ahead of the IPO, the jeweller had garnered ₹21 crore from three anchor investors — PGIM India Equity Growth Opportunities Fund, BOFA Securities Europe SA, and Negen Undiscovered Value Fund.

RBZ Jewellers specialises in designing and manufacturing a diverse range of antique bridal gold jewellery, including jadau, Meena, and Kundan works.

Shares of the Mumbai-based Credo Brands Marketing, that owns the Mufti brand of clothing, will be listed on the bourses today.

The issue price has been fixed at ₹280. The ₹549.80-crore IPO is priced in a band of ₹266-280, and was subscribed 51.85 times.

The QIB portion was subscribed 105 times, while the HNI portion was bid 55.5 times, and that of retail investors nearly 20 times.

Ahead of the IPO opening, the company garnered ₹165 crore from anchor investors, including Nippon Mutual Fund, HSBC Mutual Fund, Aditya Birla Sunlife Insurance, Kotak Mahindra Life Insurance, Bajaj Allianz Life Insurance, Integrated Core Strategies (Asia), Morgan Stanley Asia, SBI General Insurance, JM Mutual Fund, Subhkam Ventures, and Reliance General Insurance.

The funds raised will go to promoters and other sellers as the IPO was entirely an offer-for-sale by Kamal Khushlani, Poonam Khushlani, and Andrew Khushlani (promoters), and Concept Communication, Bela Properties, Jay Milan, and Sagar Milan (investor shareholders).

The company offers a range of products from shirts to T-shirts, jeans and Chinos. The products have a youthful appearance, while staying abreast of ongoing fashion trends.

Engaged in the retail sale of garments and accessories, the company does not manufacture any apparel. The brand “Mufti” was launched 25 years ago by the promoter, Kamal Khushlani.

Maithan Alloys, manufacturers and exporters of niche value-added manganese alloys, said on Tuesday that it plans to acquire 10 lakh shares (0.202 per cent) of the National Stock Exchange. In a disclosure to the stock exchanges, the company said it entered into an agreement for the purchase of 10 lakh shares for ₹324 crore, making the per-share value ₹3,240.

“The shares are proposed to be acquired through secondary market purchase and shall form part of the current investment of Maithan Alloys Limited with a view to reaping the long-term and short-term investment benefits,” it said in the disclosure.

However, in-principal approval from the NSE is required, it said.

NSE is involved in operating trading platforms for equities, derivatives, and other financial instruments. It is a leading stock exchange in India and has a dominant position with a market share by total turnover of 93 per cent in the equity cash segment, 99 per cent in the equity futures and options segment, 71 per cent in the currency futures segment, and 99 per cent in currency options trading.

Maithan Alloys has been buying stocks of various companies, especially those in the public sector undertaing from the secondary market this quarter. The companies are Coal India, Bank of Baroda, Bank of Maharashtra, Union Bank of India, Jio Financial, SBI, GAIL India, Hudco, Natco Pharma, RITES, and Canara Bank.

The firm so far has spent ₹774.60 crore to buy various companies, with NSE being the largest at ₹324 crore.

For the September quarter, the company posted a profit of ₹65.59 crore on revenues of ₹442.29 crore. For FY23, it posted a PAT of ₹426.51 crore and revenues of ₹2,907.56 crore.

Shares of Maithan Alloys closed 0.38 per cent higher at ₹1,155.45. on the BSE.

Shares of the Muthoot Pappachan Group company Muthoot Microfinance will be listed at the bourses today. The issue price of the ₹960-crore IPO has been fixed at ₹291, at the upper end of the ₹277-291 price band. The issue was subscribed 11.52 times.

The offer comprised a fresh issue of ₹760 crore (2.61 crore shares) and an offer-for-sale (OFS) of ₹200 crore (0.69 crore shares). Investor shareholders who offloaded their shares included Greater Pacific Capital WIV, and promoters Thomas John Muthoot, Thomas Muthoot, Thomas George Muthoot, Preethi John Muthoot, Remmy Thomas, and Nina George.

While the retail investors’ portion was subscribed 7.6 times, the non-institutional quota was bid 13.2 times and the QIB portion 17.47 times.

IPO screener: Muthoot Microfin issue closes today

As part of the IPO process, the company raised ₹285 crore from 26 anchor investors at ₹291 a share. Among them were Morgan Stanley, Societe Generale, Copthall Mauritius Investment, ICICI Prudential Life Insurance, HDFC Life Insurance, Bajaj Allianz Life Insurance, Kotak Mahindra Life Insurance and SBI General Life.

The company plans to use the proceeds to augment its capital base to meet its future capital requirements.

ICICI Securities Ltd, Axis Capital Ltd, JM Financial Ltd, and SBI Capital Markets Ltd are the book-running lead managers of the IPO, while Kfin Technologies is the registrar for the issue.

The Kochi-based microfinance institution has recorded 246 per cent on-year growth in net profit at ₹163.9 crore for the year ended March FY23 and revenue zoomed 71.6 per cent to ₹1,428.8 crore.

Nifty 50 began today’s session with 21,295.85 versus Thursday’s close of 21,255.05. The index added gains post the open and is now at 21,340, up 0.4 per cent.

The advance/decline ratio of Nifty 50 stands at 43/7, giving the index a positive bias. Like the benchmark, all mid- and small-cap indices are in the green. 

Besides, all sectoral indices have advanced. Nifty Realty and Nifty Metal, up 1.8 and 1.6 per cent respectively, are the top gainers.

The equity market across Asia too exhibits a positive bias. Among the majors, Nikkei 225 (33,200), ASX 200 (7,510) and KOSPI (2,600) are up between 0.2 and 0.4 per cent.

• Also read: Index Outlook: Santa Claus rally arrives early for the Sensex, Nifty 50, Nifty Bank and the Dow Jones

Nifty 50 futures

The December futures contract of Nifty 50 opened today’s session higher at 21,401.55 as against yesterday’s close of 21,350.40. It is now hovering around 21,400, up 0.25 per cent.

Although 21,420 is a potential hurdle, the contract is likely to rally past this level and touch 21,500, the nearest barrier above 21,420.

On the other hand, if the contract declines from here, it can find support at 21,320. Subsequent support is at 21,200. That said, a fall below 21,320 is less likely to happen today.

Trading strategy

Buy Nifty futures now at 21,400. Add longs in case the price dips to 21,320. Place stop-loss at 21,270. When the contract touches 21,450, raise the stop-loss to 21,380. Exit at 21,500.

Supports: 21,320 and 21,200

Resistances: 21,420 and 21,500

Bank Nifty December futures (48,020)

The Bank Nifty index is trading higher. The index is currently at 47,930, up 0.20 per cent. The advances/ declines ratio is at 11:1. This indicates the overall strength in the index. HDFC Bank, down 0.6 per cent, is the only stock in the red. Kotak Mahindra Bank is the outperformer in the index. The stock is up 1.17 per cent.

Outlook

The strong bounce from the low of 46,919 on Thursday is a positive. While intraday support is at 47,720, resistance is at 48,170. A break-out on either side of these levels will set the path for the Bank Nifty index going forward.

A decisive break above 48,170 will be bullish and could take the index up to 48,500 and higher. On the other hand, a break below 47,720 will be bearish. It can drag the index down to 47,000 again. We will have to wait and watch.

Bank Nifty futures

The Bank Nifty December (48,020) futures is trading lower. The contract is down 0.18 per cent. It faces resistance at 48,180, and has been edging down from this level. Intraday support at 47,770 can be tested during the day. A break below it will increase the selling pressure. Such a break can drag the contract lower to 47,400 and 47,000.

On the other hand, a sustained rise above 48,200 would bring back the bullishness. Only in that case will the contract gain momentum to rise towards 48,700 and higher.

Trade Strategy

We suggest traders stay out of the market today. See how the index closes for the week. Trades can be taken accordingly next week.

Supports: 47,770, 47,400

Resistances: 48,200, 48,700

Benchmark equity indices began the trade on an optimistic note on Friday tracking firm global market trends.

The 30-share BSE Sensex climbed 180.55 points to 71,045.65 in early trade. The Nifty went up by 58 points to 21,313.05.

However, both the benchmark indices faced volatile trends after early optimism but later bounced back to trade with significant gains.

Among the Sensex firms, Tata Steel, Tata Motors, NTPC, JSW Steel, Sun Pharma and Bajaj Finance were the major winners.

Infosys, HDFC Bank, Asian Paints, Tata Consultancy Services, ICICI Bank and IndusInd Bank were among the laggards.

In Asian markets, Seoul, Tokyo and Shanghai were trading with gains while Hong Kong quoted lower.

The US markets ended in the positive territory on Thursday.

“Despite FIIs selling and concerns about the Omicron variant, optimism prevails with expected Federal Reserve rate cuts and positive sentiments on India’s growth,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Global oil benchmark Brent crude climbed 0.92 per cent to $80.12 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,636.19 crore on Thursday, according to exchange data.

The BSE benchmark jumped 358.79 points or 0.51 per cent to settle at 70,865.10 on Thursday. The Nifty rallied 104.90 points or 0.50 per cent to 21,255.05.

Nifty could hit the 24200 level in 2024, driven by heavyweight stocks from the BFSI, auto, cement and healthcare sectors, ICICIdirect has said in its latest Quant Yearly Outlook report.

The Nifty was up by 119.10 pts or 0.56 per cent at 21,379.10 as of 11:30 am on Friday. The Nifty 50 pack was at 21,373.90, up by 118.85 points or 0.56 per cent. Major stocks that gained on the NSE as of 11:51 am were Divi’s Laboratories, Tata Motors, Coal India, Maruti, and Tata Steel. 

“While the Lok Sabha elections in India and the Presidential elections in US may trigger near-term volatility (spike) in the markets, declines are likely to be limited,” ICICIdirect said.

The brokerage firm expects volatility to be sticky around current levels in the coming months, and hence, recommends buying on dips in the first half of 2024. US VIX and India VIX have failed to sustain at higher levels, suggesting the strength of the equity markets.

“Despite trading near highs and gaining almost 7 per cent in the December series, Nifty has delivered ~16% returns so far in the last 12 months, which is relatively on a par with other markets,” it said.

According to the report, FPIs, who have returned to the equity markets since April 2023 as US rates seem to have peaked, bought almost ₹1,61,000 crore till August 2023. Higher FPI flows were seen in the capital goods, auto and power sectors, while IT and metals remained subdued.

On the capital front, FPIs flows could increase further in the upcoming calendar year and US rate cuts should induce capital flows, the report said.

The market has witnessed continued FPI flows for almost five years from 2010 to 2014 as the US Fed has maintained zero interest rates following the 2008 crisis. The free money has helped risk assets outperform the market, the brokerage said.

Sectors to attract FPI inflows

The banking sector stocks have largest headroom to absorb FPI inflows, while the metals sector would likely outperform in CY24. The bank nifty was the major driver of the bull run in the 2012 to 2020 cycle.

“We expect fresh flows to continue in the healthcare space, which should trigger a further outperformance in the months to come,” it added. Infrastructure sector should remain firm. Although financial services has been a relative underperformer, ICICIdirect said recent data suggested a change in the trend as the sector seems to be attracting FPI flows.

“Construction related stocks have seen continued outflows and heavyweights from the sector have relatively underperformed the market. However, due to interest rate cut expectations, fresh flows are likely in CY-24, which should propel an outperformance from the sector,” it said.

The rupee has been resilient against the dollar in recent months. Commenting on the dollar index, ICICIdirect says, “we expect the dollar index to weaken further and capital flows should be seen in emerging markets. Historical evidence suggests that India would be a major beneficiary of these flows.”

As per ICICIdirect, recommended stocks include: Dalmia Bharat Cement, Federal Bank, GAIL, Hindustan Copper, IPCA Lab and Shriram Finance.

AXISCADES Technologies stock surged 10 per cent to hit a 52-week high on the NSE, it traded at ₹675 as of 1:40 pm on Friday.

The Bengaluru-based engineering solutions provider had recently acquired EPCOGEN Pvt Ltd for ₹26.25 crore, with an additional three-year earnout of ₹7 crore based on performance.

With this alliance, Axiscades has set its footprint in the energy sector, fortifying its position in the West Asian and North American markets.

According to a stock exchange filing, the board approved raising funds through a QIP of an aggregate amount not exceeding ₹500 crore in November 2023. 

Target: ₹320

CMP: ₹250.15

In our view, PCBL’s stock price is not factoring in the value of its recently acquired Aquapharm business. Besides, PCBL’s recent JV with Kinaltek takes it further away from its traditional carbon black business.

Aquapharm’s biodegradable chelating agents (such as GLDA, HEIDA, and PESA) are rapidly replacing traditional agents (such as EDTA, DTPA). Aquapharm has been ramping up its GLDA sales in Asia where it has a strong presence. Further, basis our understanding, it has started the approval process for PESA in the European market. As per various industry estimates, the GLDA market is expected to register about 10 per cent CAGR over the next five-seven years. With strong market traction for its biodegradable agents, we believe that Aquapharm is well placed to take advantage of such favourable demand dynamics. We believe that with strong scale advantage in phosphonates (in which HEDP is the largest product) Aquapharm could register well above the 6-7 per cent industry revenue CAGR. Besides strong scale advantage in the phosphonates portfolio, Aquapharm is scaling up its biocide (methylene bis thiocyanate) and polymers (phosphino carboxylic acid, polymaleic acid) product portfolio.

• Also Read: PCBL to penetrate new geographies, expand global footprint and launch a slew of products

Going forward, we expect this momentum to continue and Aquapharm could register 13 per cent/15 per cent revenue/EBITDA CAGR over FY24E-26E.

On the funding part, we have clarity that PCBL would fund the Aquapharm acquisition with debt at this juncture. We build in 10 per cent interest cost for ₹3,500 crore debt (assuming PCBL doesn’t pay out dividend and uses ₹300 crore cash for this acquisition)

We ascribe 25x December 2025 target P/E multiple and arrive at ₹30/share equity value of Aquapharm. Hence, our December 2024 TP of PCBL is revised to ₹320/share (from ₹290/share earlier).

Target: ₹4,600

CMP: ₹3,961

Siemens, in its analyst meet, highlighted growth opportunities across segments, plans to demerge its energy division, and plans to increase localization across segments. The company is optimistic about growth prospects in the domestic market across government and private capex. It is also positive about opportunities emerging from new areas such as semiconductors, batteries, and EVs.

Siemens has approved a capex of ₹416 crore for capacity addition for power transformers and vacuum interrupters. It also plans to improve localisation across segments as demand is strong. Localisation levels are still better for the energy, smart infrastructure and mobility segments; however, for digital industries, the company will remain dependent on imports from its parent. Siemens would still have near-term dependence on traded goods for the mobility segment, but has already embarked on localisation of component manufacturing for traction components for the mobility segment at its Nashik factory. These initiatives would gradually drive margin improvement.

We believe that near-term order inflows may be affected by the general election schedule; however, in the long term, order inflow prospects remain strong from transmission, railways, data centre, industrial automation, etc.

A potential demerger and listing of Siemens’s India Energy segment should open avenues for value-unlocking over the next two-three years. We marginally revise our estimates to bake in slightly better margins and expect the company to clock revenue/EBITDA/PAT CAGRs of 16 per cent/18 per cent/19 per cent over FY23-26. We continue to value it at 55X P/E on two-year forward earnings and maintain our BUY rating with a TP of ₹4,600.

The ₹740-crore from Hyderabad-based Azad Engineering will close today for subscription. The issue has so far subscribed over 11 times. The company has fixed the price band as ₹499-524 and investors can bid for a minimum of 28 shares.

The IPO received bids for 3.35 crore shares, against 11.24 crore shares on offer.

Several sports personalities including Sachin Tendulkar, PV Sindhu, VVS Laxman and Saina Nawal had invested in the company.

About the offer

The public issue comprises a fresh issue of ₹400 crore and an Offer-for-Sale (OFS) of up to 71.60 lakh shares worth ₹609 crore.

The quota set aside for retail investors received bids for 11.17 times, while that for of non-institutions 23.54 times. QIBs portion was subscribed 1.53 times. The issue also has a reservation for employees and thier quota was subscribed 6.25 times.

Issue details

The initial public offering comprises a fresh issue of ₹240 crore and an offer-fors-sale of ₹500 crore by promoters and external investors, who included Piramal Structured Credit Opportunities Fund and DMI Finance.

Whie 50 per cent of issue has been reserved for qualified institutional buyers, 15 per cent is for high networth individuals and the balance 35 per cent for retail investors.

Anchor investors

The company raised ₹220.80 crore from anchor investors by allotting 42.13 lakh shares at ₹524 a share. Among the investors included Nippon Life India, Abu Dhabi Investment, ICICI Prudential, Nomura, Ashoka India Equity, Kotak Mahindra Mutual, Tata Infrastructure fund, Bandhan Infrastructure Fund, Edelweiss Mutual, HDFC Life Insurance, Bajaj Allianz, Max Life Insurance and Eastspring Investment India.

The company proposes to utilise the proceeds from the offer to part fund capital expenditure for its ₹280 crore expansion by setting up two units towards the end of the next fiscal and for repaying/pre-paying debt of around ₹90 crore.

Investors to remain stay invested

Even after the IPO, the company will continue to have external investors in the form of HNIs (High Networth Individuals) who include sport stars like Sachin Tendulkar, VVS Laxman, PV Sindhu and Saina Nehwal. Together, these HNIs and the employees will own around 12 per cent in the firm.

About Azad Engineering

Azad Engineering is a niche manufacturer of product lines in aerospace and defence, energy and oil and gas industries. It manufactures highly engineered, complex and mission and life-critical components. Some of its key products include 3D rotating air-foil portions of turbine engines and other critical products for defence and civil aircrafts, spaceships, defence missiles, nuclear power, hydrogen, gas power, oil, and thermal power.

In the energy space the company boasts of international clients like Siemens Energy, General Electric, Honeywell International, Mitsubishi, Eaton Aerospace and MAN Energy Solutions.

Merchant bankers to the issue are Axis Capital, ICICI Securities, SBI Capital Markets, and Anand Rathi Advisors.

Target: ₹1,000

CMP: ₹857.10

The company’s ongoing capacity expansion at its subsidiary UCWL (Udaipur Cement Works Ltd) of a 2.5 mtpa grinding unit is progressing well and is expected to commercialise in Q1-FY25. The clinker unit (1.5 mtpa) is already operational and getting stabilised. Clinker produced at UCWL will be used by JKLC for grinding

The company also announced the setting up of a grinding unit in Surat of 1.35 mtpa at a capital cost of ₹220 crore, which is to be funded out of a mix of internal accrual and debt. Out of 1.35 mtpa, 0.70 mtpa will become operational by Q3-FY25, and the balance 0.65 mtpa by Q1-FY26. The railway siding work at Durg Plant is going on as per plan.

The company is working on many levers, such as optimising geo-mix, higher production and sale of blended cement, an increasing proportion of trade sales, premium and value-added products, logistic efficiency, and the use of more renewable power, to increase its EBITDA/tonne to a four-digit number in the next 12 to 18 months.

Cement demand is expected to remain robust on the back of higher government thrust on developing infrastructure, better real estate demand, private Capex, and higher individual home builders demand.

Domestic markets are expected to open on a cautious note on Thursday. The sudden fall on Wednesday caught most investors off guard. The panic selling triggered a sharp fall across the board.

Gift Nifty at 21,114 indicates a steady start at Nifty Dec futures on Wednesday, closed at 21,217, and Jan futures at 21,316.

However, analysts expect the market to see value buying, particularly in the large-cap space. However, some small-cap and mid-cap stocks may come under pressure.

• Buzzing stocks. Stocks that will see action today: December 21, 2023

Sanjeev Hota, Head of Research, Sharekhan by BNP Paribas, said the steep fall in the market across indices was primarily led by profit booking at higher levels, coupled with concerns around the rising covid cases, and potential geo-political tension due to the impact on shipping routes in the Red Sea region arising out Houthi militias from Yemen has dented the investor sentiments.

• Read:Day trading guide for December 21, 2023: Intraday supports, resistances for Nifty50 stocks

There are hardly any margins of safety left in some pockets of mid- and small-caps after a significant run-up; thus, taking out some froth is healthy for the market, he added.

Asian stocks are down in early deals on Thursday between 0.5 per cent and 2 per cent. US stocks, too, fell overnight.

“Nevertheless, India’s structural story is getting stronger with stable government, healthy corporate earnings outlook and improving macro picture. Hence, any material dip could again provide investment opportunity in quality stocks,” Sanjeev Hota said.

• Stock to buy today: Redington (₹173.35) – BUY

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said: Markets were on a record-setting spree for a while and have been in an overbought zone, so hiccups were expected in the form of profit-taking, which came to the fore today. Redemption was seen across the sectors; even mid & small-cap stocks came under strong bear hammering. Volatility is likely to be the hallmark in the near term, with India’s VIX jumping over 4% in a day.

“Amidst overbought technical conditions, key benchmarks may consolidate in the near term, but that said, the medium-term outlook continues to be in favour of the bulls but only on any steep corrective declines. Technically, support for Nifty is seen at 20917-20707, while the index may face resistance at 21953-22001 levels,” he said.

Shares of DOMS Industries made a stellar debut at the bourses on Monday after a blockbuster IPO. Meanwhile, India Shelter Finance Corporate (ISFCL) made a decent gain of 10 per cent on listing day.

As against the IPO price of ₹790, DOMS Industries was listed at ₹1,400 on the BSE and surged further to ₹1,434.25. However, profit taking and sudden weakness in secondary market wore out the stock, which closed at ₹1,330.85, a gain of 68.5 per cent over the IPO price. On the NSE, it closed at ₹1,326.05, after hitting a high of ₹1,434 and a low of ₹1,302.

The IPO was subscribed 93.52 times overall, with QIB portion receiving nearly 116 times. Retail investors and non-institutions portions subscribed 69.67 times and 66.51 times respectively.

• Also Read: IPO screener. Retail investors pouring in money in DOMS Industries

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said, “We believe valuations would go over-tretched discounting next one-year earnings growth. Hence, we recommend allotted investors to book profits while those who failed to get allotments in the public offer can wait and watch for reasonable dips for the long term.”

The stationery major had raised ₹538 crore from anchor investors ahead of IPO.

The IPO comprised a fresh issue of ₹350 crore and an offer for sale (OFS) worth ₹850 crore. Net proceeds of the issue will be used to finance a new facility for a wide range of writing instruments, watercolour pens, markers and highlighters besides general corporate purposes.

ISFCL opens strong

Shares of ISFCL were listed at ₹612.70 on the BSE, against IPO price of ₹493, but surrendered most of the gains to close at ₹543.50, up 10.24 per cent over the issue price. On the NSE, it closed at ₹544.70. The ₹1,200-crore (₹800 crore fresh issue and ₹400 crore OFS) public issue of ISFCL was subscribed 36.71 times.

• Also Read: IPO screener: All eyes on DOMS Industries listing today

ISFCL, a major player in affordable housing segment, raised ₹360 crore from anchor investors.

The initial public offering of Suraj Estate Developers will close today for public subscription.

The ₹400-crore IPO of the Mumbai-based realtor Suraj Estate Developers Ltd was subscribed 2.42 times so far. The issue comes at with a price band of ₹340-360 and the market lot is 41 shares. The IPO is entirely a fresh issue of 1.11 crore shares.

As against the offer size of 82.35 lakh shares, the IPO received bids for nearly 2 crore shares.

Retail investors quota saw strong buying, as their portion was subscribed 3.90 times, while the NII quota was subscribed 2.06 times and that of QIB was relatively lacklustre at 0.12 times.

Fifty per cent of the issue is reserved for qualified institutional buyers, while 15 per cent is available to for non-institutions, and the balance 35 per cent for retail investors.

• Read: Suraj Estate Developers IPO: Should you subscribe to the issue?

As part of the IPO, The company on Friday raised ₹120 crore from anchor investors by allotting 33.33 lakh shares to 11 funds at ₹360 apiece.

The investors who had SBI General Insurance Company, Tata MF, ITI MF, Aditya Birla Sun Life, Jagdish Master managed Quantum-State Investment Fund, Blue Lotus Capital, Lighthouse Canton, Societe Generale, BNP Paribas and Meru Investment Fund participated in the anchor book include .

The issue proceeds will be used to from the issue for repay/ prepay ment of the aggregate outstanding borrowings of the company and its subsidiaries, Accord Estates Pvt Ltd and Iconic Property Developers Pvt Ltd; acquisition of land or land development rights; and general corporate purposes.

ITI Capital Ltd and Anand Rathi Advisors Ltd are the book-running lead managers

The company develops residential and commercial real estate in the South Central Mumbai region.

Target: ₹2,000

CMP: ₹1,566.15

We met Sumant Kathpalia, MD and CEO of IndusInd Bank, to discuss the progress on the Bank’s Planning Cycle 6 and its strategy to deliver sustainable and profitable growth. He reiterated the bank’s unwavering focus on building a strong retail liability franchisee (add more than 1,000 branches), balanced credit portfolio mix with a higher share of AHL/SME/Cards, micro-banking vs. micro-finance and, thereby, sustainable RoAs (1.8-2.2 per cent).

The bank is keen on building a strong wealth management business, including AMC, and remains open to the inorganic route. Sumant is keen on full-term extension beyond Mar-25, while the bank has appropriate succession planning in place across the top and middle management to avoid any business disruption.

We have raised our earnings estimates by 1-4 per cent over FY24-26, factoring better growth/lower LLP and expect the bank to deliver healthy RoA @1.9-2 per cent/RoE at 16-18 per cent RoE. Factoring in better earnings/RoE trajectory and margin stability amid the risk of contraction among peers, we upgrade the TP to ₹2,000/share from ₹1,825/share, rolling forward its P/ABV on 2.1x Dec-25E ABV vs. 2x Sep-25 earlier.

Devyani International through its subsidiary in Dubai, Devyani International DMCC, has entered into a share purchase agreement and shareholders agreement and other transaction documents to acquire controlling interest in Restaurants Development Co Ltd, operating a chain of 274 KFC restaurants (as of September) across Thailand. Devyani International DMCC has entered into an Investment Agreement with the company and Camas Investments Pte. Ltd, an affiliate of Temasek Holdings (Private) Limited. Pursuant to the investment agreement, the company and Camas have agreed for a total investment commitment of up to AED 151.5 million (about ₹340 crore) and AED 145.5 million (about ₹330 crore) respectively. Post investment, the Devyani International and Camas will be holding equity in the ratio of 51:49 respectively in Devyani International DMCC. These funds shall be utilised to part finance the Thailand acquisition, which is likely to be completed by March 2024.

Sun Pharmaceutical Industries said it will acquire a 16.7 per cent stake in US-based Lyndra Therapeutics, Inc for ₹30 million (about ₹250 crore). Lyndra Therapeutics Inc, based in Massachusetts, is engaged in the business of developing novel delivery technology for long-acting oral therapies, Sun Pharmaceutical Industries said.

Market buzz is that an affiliate of Warburg Pincus is seeking about $100 million in Apollo Tyres. The stake sale, roughly 3 per cent of Apollo Tyres, and the floor price is set at ₹440 apiece.

IDFC First Bank: The company has received the RBI nod for the merger of IDFC and IDFC Financial

The government on Monday cut the windfall profit tax on crude oil produced in the country and on exports of diesel. The tax, levied in the form of Special Additional Excise Duty or SAED, on domestically produced crude oil has been reduced to ₹1,300 from ₹5,000 per tonne, according to an official notification. This will keep oil marketing companies in focus.

Adani Green Energy has incorporated four step down subsidiaries – Adani Renewable Energy Sixty, Adani Renewable Energy Sixty Two, Adani Renewable Energy Sixty Three and Adani Renewable Energy Sixty Four. These entities have an authorised and paid share capital of ₹1 lakh each.

Vakrangee Limited has entered into a Share Purchase agreement for acquisition of 8.8 per cent equity share capital of Vortex Engineering Private Limited from the International Finance Corporation. Earlier, the company had signed binding term sheet with IFC in relation to acquisition of 8.8 per cent stake in Vortex Engineering Private Limited.

Royal Orchid & Regenta Hotels has opened a new property – the Regenta Inn Bhavani – in Nellore, Andhra Pradesh.

Committee of Executive Directors of Info Edge (India) has agreed to invest an amount of ₹40 lakh in Jeevansathi Internet Services Pvt Ltd, wholly owned subsidiary of the company. The transaction is done at Arm’s Length basis

The board of Shankara Building Products has approved demerger of trading business from self. Shareholders will get one share of demerged entity for every share held in the company. Trading business comprises of retail and distribution of building products.

The public issue of cryogenic tank maker Inox India witnessed a robust response from all category of investors, especially from institutions. The IPO was subscribed 61.28 times overall with QIB portion getting bids for 147.80 times. The issue came out with a price band of ₹627-660 to raise ₹1,459 crore.

The portion for non-institutions was subscribed 53.20 times and that of retail investors by 15.30 times.

The issue is entirely an offer for sale of 2.21 crore shares by its existing shareholders and promoters. Under the OFS, Siddharth Jain, Pavan Kumar Jain, Nayantara Jain, Ishita Jain, Manju Jain, Lata Rungta, among others, offloaded shares.

The company on Wednesday raised ₹438 crore from anchor investors, as part of IPO.

The company had allotted 66.33 lakh shares to 41 funds at ₹660 apiece. Among the fund houses that participated in the anchor book included Abu Dhabi Investment Authority, Nomura, Goldman Sachs, ICICI Prudential Life Insurance Company, HDFC Life Insurance Company, SBI Mutual Fund (MF), HDFC MF, Nippon India MF, Axis MF, Aditya Birla Sun Life MF and Tata MF.

Inox India, one of the leading cryogenic tank manufacturers, has over 30 years of experience offering solutions across the design, engineering, manufacturing, and installation of equipment and systems for cryogenic conditions.

The company’s offering includes standard cryogenic tanks and equipment, bespoke technology, equipment, and solutions as well as large turnkey projects that are used in industries like industrial gases, LNG, green hydrogen, energy, steel, medical and healthcare, chemicals and fertilisers, aviation and aerospace and construction.

ICICI Securities and Axis Capital are the book-running lead managers to the issue.

Domestic markets are likely to open on a negative note on Monday. However, analysts expect the market to sustain the momentum with information technology stocks joining the rally. Foreign portfolio investors continue to invest in India following the Fed’s dovish stance.

The market will remain in the consolidation phase as investors will likely indulge in sector/stock rotation. Profit-taking at higher levels and value-buying at lower levels are likely to keep the market in a range.

Manoj Purohit, Partner & Leader – FS Tax, Tax & Regulatory services, BDO India, “The recent pullout by the US on Federal rate hikes have been one of the catalysts to keep the Indian market flooded with cash flows from the FPI fraternity.

FPIs have reversed their position and turned into net buyers in the first week of December.

Gift Nifty at 21,487.50 indicates a negative start for domestic markets as Nifty futures on Friday closed at 21,557.10. Most Asian stocks are down in early deals on Monday, even as US stocks closed in the green.

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said India is one of the top investment destinations of FPIs. “There is a near consensus now in the global investing community that India has the best prospects among the emerging economies for sustained growth for many years to come. This growth has the potential to create phenomenal wealth through the stock market. FPIs are investing to benefit from this potential wealth creation,” he further said.

The other factors contributing to FPIs to pump liquidity in the Indian market are RBI’s inflation forecast at 5.4 per cent and positive signs of improved capex and valuations. The Sensex touching an all-time high also acted as an icing on the cake.

“All in all, the momentum for the Indian cash equities market reflects a promising wind up of 2023 and a strong base for 2024 to start with, taking the foreign investments inflows to a new horizon,” said Purohit.

The outlook remains positive for the stock of Adani Ports and Special Economic Zone (APSEZ) (₹1,078.55). If the current rally sustains, APSEZ can hit a high of ₹1,350.

On the other hand, APSEZ finds an immediate support at ₹1,017. A close below can weaken the stock towards ₹882. A breach of this will change the outlook negative again. We expect the stock to move in a narrow range with upward bias.

F&O pointers: APSEZ December futures closed at ₹1,085 against the spot close of ₹1,078.55, signalling the existence of long positions.

Despite the stock climbing from ₹833-level, the counter shed open interests at regular intervals. Open positions, from 5.29 crore shares on December 1, fell to 5.01 crore shares currently. Option trading indicates a wide range of ₹800-1,200.

Strategy: We advise traders to consider a bull-call spread on APSEZ. This can be initiated by selling 1100-call and simultaneously buying 1080-call. These options closed with a premium of ₹30.85 and 39.10.

As the market lot is 800 shares, this strategy would cost traders ₹6,600, which would be the maximum loss. Maximum loss would happen if APSEZ closes at or below ₹1,080 on expiry.

On the other hand, a profit of ₹9,400 is possible, if APSEZ closes at or above ₹1,100 on expiry. Keep the stop-loss at ₹2,500.

Follow-up: HDFC Asset Management swung wildly last week, hitting the target. Those who are still holding, can exit.

Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading

Impresario Handmade Restaurants, which owns premium restaurant chains like ‘Socia’l and ‘Smoke House Deli’, aims to be listed in the next two–to-three years. 

According to Riyaaz Amlani, CEO and MD, Impresario, listing would primarily be aimed at unlocking growth potential”. 

“In the next two-three years, we will start filing explorations going public. That is definitely an option that we are considering,” he told businessline. 

Currently the largest unlisted restaurant chain in India, Social continues to be its most dominant brand for the company both in terms of revenue and presence. The 50th branch of the 10-year-old brand, Social, is being inaugurated on December 21 in Hyderabad. The restaurant chain has a presence across Mumbai, New Delhi, Pune, Bengaluru, Chennai, Kolkata, Chandigarh, Indore and Dehradun.

Impresario also owns a cultural events space called “antiSocial” in Mumbai, Pune and Goa. 

Founded by Amlani in 2001, Impresario owns and manages an umbrella of other restaurant brands like ‘Mocha’,’Salt Water Cafe’, ‘Slink & Bardot’ and ‘Souffle’. Impresario has over 65 outlets in 20 Indian cities. 

In India, Barbeque Nation, Restaurant Brands Asia (parent company of Burger King), Speciality Restaurants Limited – the parent company of Mainland China and Oh! Calcutta – and Jubilant Foodworks, the master franchise for Domino’s Pizza in India, are among the few listed entities in the sector. 

Fund Raise 

According to documents submitted to the Ministry of Corporate Affairs, Impresario has, between September and November, received investments to the tune of ₹43 crore. While Kotak Mahindra Bank invested Rs 25 crore, HDFC Bank invested ₹18 crore.

Last year, IndiaRF became the majority shareholder of Impresario and L Catterton Asia exited its five-year-old investment in the restaurant chain. 

When asked if the company was well funded, Amlani said, “Currently, the company is very well capitalised and under-leveraged. As we go along, we will improve those ratios (funding) a little bit, but we feel very confident that we are completely funded for the group. We also have a decent line of credit available ”

The net inflow through the Systematic Investment Plan at ₹9,058 crore accounted for 56 per cent gross inflow of ₹17,073 crore in July with the number of new SIP increasing at a faster pace. In fact, it has been growing since July when net SIPs added up to only 36 per cent of gross inflows.

The net SIP inflows last month jumped 65 per cent to ₹9,058 crore against ₹5,494 crore in July.

Incidentally, the gross SIP inflows had hit a new high of ₹17,073 crore against ₹14,734 crore in July, an increase of 16 per cent.

The net SIP accounted for 55 per cent of gross inflow in January and fell to 36 per cent in July before moving up, showed an analysis of data from the Association of Mutual Funds in India.

• Read: How to plan and invest in an SIP?

Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company, said many investors waiting for a steep fall in the market to restart equity investment were disappointed with the relentless rally and paid a high price.

Market volatility and SIPs

Retail investors are using the SIP route to tap the equity market to battle the concern of higher valuation. This is one of the reasons why there has been a steady increase in SIP inflows, he added.

The total number of SIP accounts has jumped 23 per cent to a record high of 7.44 crore against 6.05 crore in the same period last year.

• Listen: Understanding different types of mutual fund SIPs 

With about 95 per cent of the SIP investment pouring into equity, the share of SIP at ₹9,058 crore increased to 33 per cent of gross equity sales from 27 per cent in October.

Melvyn Santarita, Analyst, Morningstar Investment Research India, said while both the mid- and the small-cap categories have the potential to deliver good returns, these categories inherently are volatile with sharp drawdown risks.

Investors should opt to invest in these categories through the SIP route to ride the volatility, he added.

• Back To Basics: Decoding SIP and SWP combination facility in MFs

Gopal Kavalireddi, Vice President of Research at FYERS said with elections around the corner and expectations of better FII flows in stock markets, equities could continue to rally, with minor intermittent profit booking.

Taking advantage of the market buoyancy, 6 out of the 14 NFOs launched by AMCs were equity-oriented, raising ₹1,907 crore of the overall ₹2,583 crore funds mobilised.

Target: ₹151

CMP: ₹122.56

In Q2-FY24, CESC exhibited consistent financial performance. Revenue from operations surged to ₹4,352 crore, marking an 11.2 per cent y-o-y increase and a 1 per cent q-o-q rise, primarily attributed to an uptick in average tariffs and a resurgence in demand following the recovery in Q1-FY24. EBITDA reached ₹646 crore, soaring by 31.8 per cent y-o-y but experiencing a 10.8 per cent decrease q-o-q.

EBITDA margins strengthened to 14.8 per cent y-o-y, a 230 bps increase, driven by reduced energy consumption costs. However, the cost of energy consumed increased on a quarterly basis, causing a 200 basis points decline, mainly due to the escalation in coal prices.

Also read: Broker’s call: Sonata Software

The reported PAT reached ₹363 crore, demonstrating a robust 13.8 per cent y-o-y rise and a marginal 1.4 per cent decrease from the preceding quarter. It is anticipated that the PAT margins will be maintained owing to the industry’sstable earnings model.

We uphold our Buy recommendation for CESC, with a revised target price of ₹151. This adjustment is based on a P/B ratio of 1.5x, leveraging the projected BVPS of ₹100.8 (FY25E).

Additionally, a strong demand in the power sector, attributed to substantial advancements in industrial and economic activities, has led to a rebound in Q1-FY24.

Investors’ appetite for initial public offerings remains undiminished, as offers of both DOMS Industries and India Shelter Finance Corporation Ltd (ISFCL), that ended on Friday, were gobbled up by them. Against the issue size of ₹1,200 crore each, these IPOs (along INOX India) generated an interest of over ₹1-lakh crore.

While the IPO of DOMS Industries was subscribed 93.52 times on the last day of issue closing, that of ISFCL generated an interest of 36.71 times. INOX India IPO, that will close on Monday, was subscribed 7.14 times.

DOMS Industries, a stationery business company, received bids for 82.65 crore shares against 88.37 lakh shares on offer. While retail investors portion was subscribed 69.67 times, quota reserved for non-institutional investors received bids for 66.51 times and that of qualified institutional buyers saw even better bidding of 115.97 times. The employee quota also received bids for 29.21 times.

Also read: Will IREDA stock be a redux of IRCTC at the bourses?

The IPO comprised a fresh issue of ₹350 crore and an offer for sale (OFS) worth ₹850 crore. Net proceeds of the issue will be used to finance a new facility for a wide range of writing instruments, watercolour pens, markers and highlighters besides general corporate purposes.

As part of the IPO, the stationery major had raised ₹538 crore from anchor investors who included Abu Dhabi Investment Authority, Optimix Wholesale Global Emerging Markets, Ashoka Whiteoak Emerging Markets, Fidelity Funds, Goldman Sachs, Theleme India Master Fund and Belgrave Investment Fund.

Homing in on

The IPO of India Shelter Finance, which came out at a price band of ₹469-493, received bids for 66.75 crore shares against an offer of 1.79 crore shares.

While retail investors portion was subscribed 9.95 times, quota reserved for non-institutional investors received bids for 28.51 times and that of qualified institutional buyers 89.70 times. The offer consisted of a fresh issue of 1.62 crore shares worth ₹800 crore and an OFS of 81.13 lakh shares worth ₹400 crore.

As part of the IPO, the retail-focused affordable housing finance company raised ₹360 crore from anchor investors.

Also read: Accent Microcell jumps 125% at NSE-Emerge listing

As many as 38 investors participated in the anchor book, including prominent names such as Goldman Sachs, Massachusetts Institute of Technology, NHIT and Steinberg India. Mutual funds such as ICICI Prudential Mutual Fund, Nippon Life India, Kotak Mahindra Trustee, Axis Mutual Fund, UTI Mutual Fund, Mirae Asset, Whiteoak Capital, LGT Select Funds, Tata Mutual Fund, Franklin India, Motilal Oswal Mutual Fund, Edelweiss Trusteeship, Bandhan Financial Services, Quant Mutual Fund, and Axis Growth Avenues AIF 1 were also received shares in the anchor portion.

The company will use the proceeds worth ₹640 crore to meet its future capital requirements for lending and the balance for general corporate purposes.

Cyient DLM Ltd: Anthony Montalbano, CFO

Our Outlook Is Similar To Industry Growth Levels Of 30-50%: Cyient DLM

Gulf Oil India : Ravi Chawla, MD

Expect Industry Growth At 2-3% This Year, Company Will Continue To Gain Market Share: Gulf Oil

Inox India Ltd: Siddharth Jain, Promoter & Non Executive

Currently Have 3 Operating Facilities, Will Start Our 4th Facility: INOX India

NLC Nalco India : Prasanna Motupalli, CMD

Renewable Capacity Needs To Be Doubled By 2030 On A Global Scale: NLC India

PG Electroplast: Vikas Gupta, ED MD

Room AC Biz Can Generate ?1,500 Cr Revenue In FY25: PG Electroplast

Symphony: Nrupesh Shah, ED-Corporate Affairs

Fund Infusion In Symphony AU To Be Used For Debt Repayment & Working Capital: Symphony

TTK Prestige: TT Jagannathan, MD

Will Grow In Double Digits In The Second Half Of This Year: TTK Prestige

DOMS Industries: Santosh Rasiklal Raveshia, MD

Total Capex Close To ?450 Cr, Will Focus On Domestic Market To Drive Sales: Doms Industries

Fedbank: Anil Kothuri, MD CEO

Small Mortgage Business Will Continue To See Growth Momentum: Fedbank Financial Services

Inox India Ltd: Siddharth Jain, Promoter & Non Executive

INOX India IPO: Price Band Fixed At ?627-660

Events today…

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Target: ₹4,270

CMP: ₹3,363.50

The 12 per cent correction in PI Industries stock price for the past two trading sessions since the Agropages news report regarding pyroxasulfone (a pre-emergent herbicide used in wheat, maize, and soybean) capacity creation in China should abate, given that pyroxasulfone is likely to be under patent in the US (the largest market) and Latin America until CY25 and CY30, respectively.

It has gone off-patent only in smaller markets of India and Australia; 2) securing registrations for generic pyroxasulfone in the US is unlikely before CY26; 3) the pyroxasulfone market size is likely to expand vs. the current market size of ₹600–700 million as per management, led by increased penetration in major consumption markets of the Americas and Australia.

The financial impact of increased competition or global inventory of pyroxasulfone is unlikely, and we expect the recent correction to be short-lived. Pyroxasulfone, as a molecule, would continue to see market expansion as it is still under patent in key geographies of the Americas.

We keep our earnings estimates unchanged. Due to a 12 per cent correction in the stock price in the past two days (vs. a 0.5% decline in the Sensex), we upgraded the stock to Buy from Accumulate with an unchanged TP of ₹4,270 based on 30x FY25E EPS of ₹143.

Bengaluru-based Denta Water and Infra Solutions Ltd has filed its draft red herring prospectus with Securities and Exchange Board of India to raise funds through initial public offering (IPO).

The public offer from a water engineering, procurement, and construction services provider is entirely a fresh issue of up to 75 lakh shares.

The proceeds from the fresh issue, to the extent of ₹150 crore, will be used to meet working capital requirements.

The company, in consultation with the lead bankers to the issue, may consider a further issue of equity shares on a private placement, rights issue, preferential issue, or any other method aggregating up to 11 lakh shares (pre-IPO placement). If such placement is completed, the fresh issue size will be reduced, it said.

Also read: Time to book profit and exit mid- and small-cap companies, says Kotak Alternate Asset Honcho Jitendra Gohil

Denta Water and Infra Solutions, established in 2016, has completed 16 water management projects, mainly in Karnataka, and is presently undertaking 19 water management projects that are in various stages of implementation.

It participates in tenders for developing projects such as infrastructure for groundwater recharging, lift irrigation, and infrastructure for supplying drinking water to various habitations under Jal Jeevan Mission.

SMC Capitals Limited is the sole book-running lead manager, and Integrated Registry Management Services Private Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.

Benchmark equity indices Sensex and Nifty eked out gains on Wednesday following late buying in capital goods, auto and energy shares, as investors adopted a cautious approach ahead of the US Fed interest rate decision to be announced later in the day.

The 30-share BSE Sensex advanced 33.57 points or 0.05 per cent to settle at 69,584.60, driven by late buying. During the day, it fell 450.47 points or 0.64 per cent to 69,100.56.

The Nifty gained 19.95 points or 0.10 per cent to 20,926.35.

Among the Sensex firms, NTPC, Power Grid, Mahindra & Mahindra, Larsen & Toubro, Sun Pharma, State Bank of India, Titan and Tata Steel were the major gainers.

Tata Consultancy Services, Infosys, Axis Bank, Bajaj Finserv, UltraTech Cement and Bajaj Finance were the major laggards.

In Asian markets, Seoul, Shanghai and Hong Kong settled lower, while Tokyo ended in the positive territory.

European markets were trading with gains. The US markets ended in the positive territory on Tuesday.

Global oil benchmark Brent crude declined 0.27 per cent to $73.04 a barrel.

Foreign institutional investors (FIIs) were buyers on Tuesday as they bought equities worth Rs 76.86 crore, according to exchange data.

Snapping its declining trend, retail inflation rose to a three-month high of 5.55 per cent in November on firming food prices, including vegetables and cereals, though it remains within the RBI’s comfort zone of less than 6 per cent.

After a two-day rally, the BSE benchmark fell by 377.50 points or 0.54 per cent to settle at 69,551.03 on Tuesday. The Nifty declined 90.70 points or 0.43 per cent to 20,906.40.

Target: ₹1,484

CMP: ₹1,303.30

L G Balakrishnan Brothers (LGB) manufactures roller chains and undertakes metal forming, including warm & cold forging, fine blanking and machined parts.

With the Indian two wheeler industry in a cusp of an entrenched slowdown – barring robust festive sales this year – LGB’s transmission business bore the brunt of this slowdown as it posted that revenues grew by an abysmal 3.7 per cent in the first half of current fiscal when compared with year ago period.

Also read: Markets take a breather after record-breaking rally; Nifty hits all-time high in intra-day trade

Yet its earnings barely swooned for it grew by an astonishing 17.1 per cent thus resulting in 200 bps expansion in margins presumably due to meltdown in raw material prices.

The stock currently trades at 15x FY24e EPS of ₹85.03 and 12.9x FY25e EPS of ₹98.90. In view of scarcely robust growth in the two-wheeler industry in the first half of current fiscal, we have trimmed down our current year earnings estimates by some 8 per cent.

Earnings may gain momentum next fiscal though not without risk of mounting cost pressures. Capital allocation holds key for the pile of liquid assets has shown little signs of diminishing. Balancing odds, we assign “accumulate” rating on the stock with revised target of ₹1,484 (previous target: ₹739) based on 15x FY25e earnings, over a period of 9-12 months.

Benchmark stock indices closed lower on Tuesday due to profit taking by investors after a record-breaking rally and ahead of release of key inflation numbers.

After a two-day rally, the 30-share BSE Sensex fell by 377.50 points or 0.54 per cent to settle at 69,551.03. During the day, it declined 484.68 points or 0.69 per cent to 69,443.85.

The Nifty declined by 90.70 points or 0.43 per cent to 20,906.40. In intra-day trade, it hit a record high of 21,037.90. Key stock indices had settled at lifetime high levels on Monday following buying by foreign investors.

Among the Sensex firms, IndusInd Bank, Maruti, Titan, Reliance Industries, NTPC, Mahindra & Mahindra, Larsen & Toubro, Kotak Mahindra Bank and HDFC Bank were the major laggards.

Also read: Muthoot Fincorp plans IPO in 2-3 years

UltraTech Cement, JSW Steel, Axis Bank, Tata Consultancy Services, Wipro and ITC were the major gainers.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled in the postitve territory.

European markets were trading mostly in the green. The US markets ended with gains on Monday.

“Following the recent impressive surge, the Nifty-50 has undergone a consolidation phase today due to anticipated elevated November inflation in India, driven by rising food prices, which may potentially delay RBI policy cuts. In contrast, the US inflation outlook remains stable, which could influence the upcoming US Fed policy,” said Vinod Nair, Head of Research, Geojit Financial Services.

Global oil benchmark Brent crude climbed 0.39 per cent to $76.33 a barrel on Tuesday.

Foreign Institutional Investors (FIIs) bought equities worth ₹1,261.13 crore on Monday, according to exchange data.

The BSE benchmark surged past the 70,000-level for the first time on Monday, reaching its record intra-day peak of 70,057.83. It ended at 69,928.53, registering a gain of 102.93 points or 0.15 per cent.

The Nifty gained 27.70 points or 0.13 per cent to settle just below the 21,000 level at 20,997.10, its all-time closing high.

Today it was the turn of BSE Sensex to record historical milestone after NSE Nifty scaling the 21,000 peak on Friday. The BSE Sensex breached the 70,000-mark for the first time on Monday, hitting an all-time high of 70,057.83 as foreign portfolio investors (FPIs) continue with strong inflows.

However, the Sensex surrendered some gains to close at 69,928.53, up 102.93 points or 0.15 per cent. The NSE Nifty50 gained 27.70 points or 0.13 per cent to 20,997.10. FIIs bought equities worth ₹3,632.30 crore, per exchange’s provisional data.

According to market experts, strong domestic economic growth and return of FIIs will drive the market higher in the coming months. The sustained gains helped the market-cap of Indian stocks rule above ₹4-trillion mark.

Top gainer, losers

Within the Sensex constituents, UltraTech Cement (3.14 per cent), Power Grid Corporation of India (1.05 per cent), Nestle India (0.91 per cent) and HCL Tech (0.87 per cent) were the top gainers. Axis Bank (1.26 per cent), Mahindra and Mahindra (0.99 per cent), Hindustan Unilever (0.67 per cent) and Maruti (0.59 per cent) were the major laggards.

Also read: Broker’s Call: Max Healthcare (Buy)

Sunny Agrawal, Head Equity Fundamental Research, SBI Securities, said, “Going by the historical m-cap to GDP ratio of 80-120 per cent, India’s m-cap is likely to hit $7 trillion by or prior to 2030 (assuming 100 per cent m-cap/GDP ratio). The market cap can increase due to increase in net valuation of the already listed universe and new listings in the form of IPO.”

On BSE, except BSE Healthcare and BSE Oil and Gas, all the sectoral indices ended in green on Monday. BSE Commodities was the top gainer with 1.16 per cent followed by BSE Metal (1.10 per cent), BSE Services (0.95 per cent) and BSE Realty (0.92 per cent).

Broad market

The broad market, too, reported strong performance with BSE MidCap gaining 0.91 per cent, BSE SmallCap (0.71 per cent) and BSE 500 (0.36 per cent).

Of the 4,035 stocks traded on BSE, 2,372 closed in green, 1,499 declined and 164 remained unchanged. As many as 366 stocks hit 52-week high and 27 stocks hit 52-week low.

‘Range-bound’

According to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd, markets are likely to consolidate in a range for the next few days as global central banks are set to announce policy outcomes this week.

Also read: Broker’s Call: Aditya Vision (Buy)

US and India inflation along with India’s manufacturing data will keep investors cautious on Tuesday, he added.

The US Federal Open Market Committee (FOMC) is scheduled to meet on December 12-13 to decide the future course of the country’s monetary policy.

Equity benchmark Sensex breached a new milestone of 70,000 points before closing 102 points higher, while Nifty settled just shy of the 21,000 mark on Monday, driven by gains in banking, IT and metal shares.

After a gap-up opening, the 30-share index rose to a record intra-day high of 70,057.83 points. Later, it shed some of the gains to close at 69,928.53 points, showing gains of 102.93 points or 0.15 per cent.

As many as 18 Sensex shares closed in the green, 11 declined, and one settled unchanged.

The broader Nifty also hit its record trading high of 21,026.10 amid early gains in global markets. The 50-share index gained 27.70 points or 0.13 per cent to settle just below the 21,000 level at 20,997.10, its all-time closing high.

Among Sensex shares, Ultratech Cement jumped the most by 3.04 per cent. Nestle rose by 1.3 per cent, Power Grid by 1.05 per cent and Tata Motors by 0.85 per cent. Gains in IndusInd Bank, HCL Tech, TCS, Tech Mahindra, NTPC, ITC, JSW Steel and Tata Steel helped the barometer scale a fresh high.

Also read: Rupee settles almost flat at 83.39 against US dollar

Axis Bank fell the most by 1.26 per cent, M&M by 0.99 per cent and Hindustan Unilever by 0.67 per cent. Maruti, Bajaj Finserv, Bharti Airtel and HDFC Bank and Infosys also declined.

“The market crossed 70,000 levels today, while the broader market outperformed the main indices. However, profit booking was evident at higher levels as traders anticipated clues from tomorrow’s significant data releases on inflation from the US and India, as well as the IIP,” Vinod Nair, Head of Research at Geojit Financial Services, said.

Investors will be closely watching the upcoming FOMC meeting tomorrow for clues about potential future rate cuts while expecting to keep rates the same this time, Nair added.

Meanwhile, Asian markets were mixed. Hong Kong’s Hang Seng dropped 0.8 per cent and the Shanghai Composite added 0.7 per cent while Tokyo’s Nikkei 225 index gained 1.5 per cent.

In Europe, Germany’s DAX was unchanged, and the CAC 40 in Paris gained 0.2 per cent. In London, the FTSE 100 was down 0.4 per cent.

Foreign Portfolio Investors (FPIs) have turned bullish, investing ₹26,505 crore into domestic equities in the first six trading sessions of December.

Benchmark Sensex and Nifty rebounded to close at their new lifetime highs on Friday after the Reserve Bank raised the growth forecast for the current fiscal and kept policy rates unchanged, triggering heavy buying in banking and other rate-sensitive stocks.

The 30-share BSE Sensex rose 303.91 points, or 0.44 per cent, to hit its new peak of 69,825.60. The index touched the highest intra-day level of 69,893.80.

The broader index Nifty also climbed 68.25 points or 0.33 per cent to reach a fresh record high of 20,969.40.

Among major Sensex movers, HCL Tech logged the biggest gain of 2.69 per cent, followed by JSW Steel (2.44 per cent) and Infosys (1.67 per cent. Other gainers included HDFC Bank, Titan, Axis Bank and ICICI Bank.

In contrast, ITC, Mahindra & Mahindra and Bajaj Finance were among the laggards.

“The RBI took a balanced approach by raising the economic growth forecast and also expressing concern on food inflation, which may have an elevated trajectory in the short term. A drop in rabi sowing and dipping reservoir levels provides a perception that foodgrain prices can rise. The impact was visible on FMCG stocks, which underperformed today,” said Vinod Nair, Head of Research at Geojit Financial Services.

Foreign institutional investors sold shares worth ₹1,564.03 crore on Thursday, according to exchange data.

The six-member Monetary Policy Committee of the RBI on Friday decided to keep the benchmark repurchase (repo) rate at 6.5 per cent.

The central bank raised its forecast for economic growth to 7 per cent from 6.5 per cent, maintaining India’s position as the world’s fastest-growing major economy, after a stronger-than-expected 7.6 per cent growth in the July-September quarter.

Elsewhere in Asia, Shanghai Composite gained 0.11 per cent, while the Nikkei 225 and Hang Seng fell by 1.68 per cent and 0.15 per cent, respectively.

European markets were trading higher with France’s CAC 40 gaining by 0.91 per cent and London’s FTSE 100 rising by 0.55 per cent. Germany’s DAX was trading 0.39 per cent higher.

The US markets ended with significant gains in overnight trade on Thursday, with the Nasdaq rallying more than 1 per cent.

Global oil benchmark Brent crude was trading 1.62 per cent higher to $75.25 a barrel.

On Thursday, the 30-share index fell 132.04 points, or 0.19 per cent, to close at 69,521.69. Nifty declined 36.55 points, or 0.17 per cent, to settle at 20,901.15.

Target: ₹2,350

CMP: ₹2,455.90

BEML management expects revenue to grow by 20 per cent y-o-y in FY24 to ₹4,500-4,800 crore (earlier ₹5,000 crore), driven by execution ramp-up in defence & aerospace (D&A) and rail & metro ([R&M]; both segments set to post a 30-40 per cent CAGR over FY24-26) while mining & construction (M&C) could grow at a 5-8 per cent CAGR.

It also aims to improve mix in FY24 to 45:55 in M&C and R&M & defence, respectively, from 50:50 in FY23.

We raise our EPS by 10 per cent in FY24, 19 per cent by FY25 and 15 per cent in FY26 based on improved mix, staff cost containment and better execution amid improving pipeline and expansion program. Accordingly, we raise our TP by 17 per cent to ₹2,350 on 25x (unchanged) September 2023 P/E. The current orderbook at ₹12,700 crore provides revenue visibility for the next three years, led by: execution of the Mumbai & Bengaluru Metro and defence orders over FY24-26; strong inflow pipeline in rail, metro & defence, due to indigenisation focus; and incremental orders for mining equipment in the coal segment.

These bode well for growth prospects. We reiterate Reduce as the stock outperformed by 50 per cent over the past six months.

Target: ₹184

CMP: ₹158.70

Bharat Electronics Ltd (BEL) reported in Q2-FY24 revenue from operations to ₹3,993.30 crore, up 1.2 per cent y-o-y and 13.5 per cent q-o-q. EBITDA stood at ₹1,014 crore, up 16.8 per cent y-o-y and 50.8 per cent q-o-q. EBITDA Margins stood at 25.3 per cent, up 340bps y-o-y and up 630bps q-o-q due to an improvement of 340 bps is seen due to favorable product mix.

PAT stood at ₹812.30 crore, up 26.5 per cent y-o-y and 46.6 per cent q-o-q. BEL has experienced relatively stagnant revenue growth due to disruptions in Karnataka. Furthermore, the effects of these disturbances, coupled with holiday-related spillovers in other regions, have contributed to the observed revenue flatness.

We expect now onwards guided revenue growth of 15-17 per cent would be seen in coming quarter and further we expect 2H24 would be better than H1-24 as execution performance starts improving from the end of the Q3 and peaks at Q4.

We remain bullish on the company, valuing it at a target price of ₹162 with a P/E of 28x using forecasted EPS of INR 5.76 (FY25E). We maintain Buy for the company due to its healthy order book, diversification and export growth.

At the recent Global Economic Policy Forum 2023, organised by the Department of Economic Affairs in Finance Ministry and Confederation of Indian Industry, Ridham Desai, Managing Director, Morgan Stanley India, made three important observations with respect to the stock market.

Desai highlighted that there are a lot of reforms that could be pursued, including opening up stock lending in a big way. “We also need a longer list of single stock futures,” he further said.

Besides, Desai observed that Indian markets still don’t have hedging mechanisms for certain big volatile events such as general elections. “There is no mechanism to do long-dated put,” he said.

Stock lending

Opening up stock lending in a big way at this stage may not help much at this juncture. Similarly, introducing more single stock futures will also not serve the purpose as trading in existing single stock futures is also limited. Besides, a recent study by the market regulator pointed out that 67 per cent traders in stock futures suffered an average loss of ₹2.1 lakh.

However, domestic markets definitely need hedging instruments for certain big volatile events. Though National Stock Exchange does have a long-term options contract on Nifty 50 (introduced in 2008), the activity is less. LEAPS can be more suitable to traders who prefer long-term exposure on indices and for investors who are looking to hedge portfolios. Exchanges and intermediaries such as brokerages and investment advisors should make the options popular through investor education.

What is inverse ETF

However, the most apt products could be inverse exchange traded funds and funds based on volatility index.

An Inverse Index ETF provides the investor an opportunity to create a position which gives inverse (opposite) returns of the index. The index is designed to provide the inverse performance of the benchmark, representing a short position in the index.

Inverse index ETFs are a cost-effective way to express a bearish opinion. They, typically, like any other ETFs , have low expense ratios.

Nifty Inverse index

Though the NSE had launched Nifty50 PR 1X Inverse in October 2014, it was not open to domestic investors. However, investors in Taiwan (through Fubon NIFTY -1 Inverse Index ETF) and Hong Kong (CSOP Nifty 50 Daily (-1x) Inverse ETF) have an opportunity to hedge through these funds. In a bullish market like the current one, these indices typically give negative return. In fact, NSE’s November factsheet revealed that the index has provided a negative return of 9.37 per cent since inception and YTD return of negative 5.27 per cent.

Another product should be Volatility ETFs based on prominent indices. Sadly, NSE was forced to withdraw trading on India VIX (that was launched in 2014) future and options due to lack of trading interest. Derivative contracts on NVIX failed due to its complexity in nature and lack of institutional presence.

Volatility ETFs based on Chicago Board of Options Exchange Volatility Index are quite popular in the US markets.

Perhaps it’s time to refine the features of NVIX and consider introducing a VIX based on other widely-followed indices, such as Bank Nifty and Bank FinNifty, incorporating enhanced features. As derivatives gain popularity on these offerings, the possibility of launching ETFs tied to them emerges, providing investors with effective risk hedging tools.

Shares of MRF Ltd on Friday breached the ₹50,000-crore market cap on Friday as they were on a roll in the last few months.

The stock closed at ₹1,17.916.10 on the BSE, up 0.41 per cent, over previous day’s close ₹1,17,430.80. Today’s gain pushed the market-cap to ₹50,009.90 crore. MRF hit a 52-week high of ₹118,960 on Thursday.

• Also read: MRF’s Q2 profit soars five-fold to ₹572 crore

However, MRF is the second largest market-cap company among tyre makers. Balkrishna Industries tops the list with ₹50,313.70 crore. Others such as Apollo Tyres (₹29,109.85 crore), Ceat (₹9,400.20 crore), JK Tyre & Industries (₹8,576.22 crore), TVS Srichakra (₹3,459.49 crore) and Goodyear India (₹3,042.10 crore) are far away in terms of market-cap.

Though MRF stock price is ruling over ₹1 lakh due to its low float (42.41 lakh shares), the market cap is much lower compared some of the prominent stocks. Due to large equity base, shares such as Reliance Industries (₹16.61-lakh crore), TCS (₹13.27-lakh crore), HDFC Bank (₹12.55-lakh crore), ICICI Bank (₹7-lakh crore), Infosys (₹6.18-lakh crore), HUL (₹5.92-lakh crore), Bharti Airtel (₹5.62-lakh crore), ITC (₹5.60-lakh crore), SBI (₹5.48-lakh crore) and LIC (₹4.89-lakh crore) command higher market-cap despite their respective share prices ruling much lower when compared with MRF.

Infrastructure consultancy and engineering firm RITES has entered into a memorandum of understanding (MoU) with Oil India Limited, the national oil company, to develop Duliajan Township, Assam, as a mini smart city.

As per the press statement, RITES will review the existing system and prepare a suitable/feasible design to develop Duliajan Township.

The stock of RITES closed on Friday at 474.10 on the NSE, down by 1.71%.

Tata Power stock zoomed to an all-time high of ₹332 on Thursday on the BSE that helped it to cross ₹1-lakh crore market capitalisation (₹1.04-lakh crore). The stock closed almost 11 per cent higher at ₹325.7 higher from Wednesday’s close of ₹294.1. In fact, Tata Power has been rallying in the last one week on the back of the company’s shift in strategy to focus on high-value segments and a few order wins. From December 1 to date, the stock has moved over 20 per cent.

Trading volume, too, quadrupled to 82.44 lakh against its two-week average of 20.83 lakh. On the NSE, the stock closed at ₹325.80, with nearly 15.23 crore shares changing hands.

Brokerage firm JM Financial pointed out that the company’s recalibrated strategy involves tapping high-margin group captive RE (renewable) opportunities, exiting low-value businesses, venturing into brownfield pumped hydro storage, and expanding transmission business beyond distribution. “This, coupled with the visible resolution of the Mundra issue, positions the company for accelerated growth,” it said, while upgrading the stock from Hold to Buy. It also revised the target price to ₹350 from ₹220 earlier “indicating a potential upside of 24 per cent from current levels”.

Bhavik Patel, Sr Research Analyst, Tradebulls Securities, told businessline that Tata power won the bid to acquire the Bikaner-Neemrana power transmission project from the Rajasthan government, “providing the trigger for Tata Power reaching new heights.”

Recalibration exercise

As part of its recalibration exercise, Tata Power plans to prioritise higher-margin group captive opportunities over third-party contracts. For instance, the company had converted diesel-powered pumps in the agricultural sector to solar-powered irrigation pumps. JM Financial report added that the company has installed over 97,000 pumps “with limited contribution to the bottom line. The shift of focus from this business area and recalibration of its strategy to optimise management bandwidth for more lucrative prospects and is a welcome move.”

Among the 3,760 GW of projects under construction, 1,271 MW are captive projects, representing 33 per cent of the RE pipeline (which is expected to grow steadily), it explained. “The recent order from Tata Steel for a 966-MW RE-RTC project exemplifies this new strategic direction,” the report added.

According to Elara Securities, power generation is expected to remain steady in the upcoming months, due to an uptick in economic activity. “Soaring energy requirement, increased focus on energy transition, sizeable pipeline of capacity expansion, foray into green hydrogen, energy storage solutions (pumped storage) and regulatory reforms in the sector are expected to bode well for our power coverage universe,” it said in its report on the power sector, adding that it remained positive on firms focused on RE capacity with a strong balance sheet likeTata Power.

Benchmark equity indices Sensex and Nifty snapped their seven-day winning streak on Thursday as investors booked profits after recent sharp gains amid negative cues from Asian markets.

The 30-share BSE Sensex fell 132.04 points, or 0.19 per cent, to close at 69,521.69. The gauge hit the lowest intra-day level of 69,320.53.

Broader index Nifty also declined 36.55 points, or 0.17 per cent, to settle at 20,901.15.

Analysts said crude oil prices in international markets failed to boost sentiment amid selling pressure from foreign institutional investors even as traders stayed on the sidelines ahead of RBI’s monetary policy decision.

• Also read: Large-caps better placed than mid- and small-caps

The Reserve Bank of India is expected to maintain the status quo on the interest rate in its bi-monthly monetary policy decision to be announced on Friday.

Major laggards among Sensex constituents included Bharti Airtel, Hindustan Unilever, Tata Steel and ITC.

Power Grid, UltraTech Cement, NTPC and Titan emerged as winners.

As many as 17 shares of the 30-share Sensex ended the session in red, while 23 Nifty firms closed lower.

According to Vinod Nair, Head of Research at Geojit Financial Services, the market took a breather as investors are in a wait-and-watch mode ahead of the monetary policy announcement.

“A better-than-estimated Q2 GDP growth, ease in global oil prices and drop in global bond yield will be the silver lining for the MPC. However, the expectation of a rise in domestic November inflation, drop in Rabi cultivation and increase in foodgrain prices will influence RBI to adopt a cautious approach in the short-term,” he said.

Meanwhile, in Asian markets, Nikkei 225 declined by 1.79 per cent. Hong Kong’s Hang Seng was off 0.73 per cent and China’s Shanghai Composite fell 0.09 per cent.

Among European markets, France’s CAC 40 rose 1.53 per cent. Germany’s DAX fell 0.19 per cent and London’s FTSE 100 lost 0.31 per cent. The US markets ended on a mixed note on Wednesday, with the S&P 500 registering a loss of 0.39 per cent.

On Thursday, global oil benchmark Brent crude was trading 1.01 per cent higher at $75.05 a barrel..

On Wednesday, Sensex surged 357.59 points, or 0.52 per cent, to settle at a new record of 69,653.73. The broader index Nifty climbed 82.60 points, or 0.40 per cent, to hit its fresh peak of 20,937.70.

Foreign institutional investors sold shares worth ₹79.88 crore on Wednesday, according to exchange data.

Target: ₹255

CMP: ₹238.95

JSW Infrastructure (JSWIL) in its filing has announced the acquisition of a majority stake (50 per cent equity plus 1 share) in PNP Port Maritime Service Pvt Lt d (PNPL) from Shapoorji Pallonji Group for a cash consideration of ₹270 crore (enterprise value of ₹700 crore, 16.7xFY23 EV/EBITDA as per our calculations).

This is in line with JSWIL’s value-accretive acquisition strategy, as outlined in our earlier coverage. JSWIL has already announced two acquisitions (liquid terminal in Fujairah and CTO licence in Nov’23) since its listing in Oct’23.

PNPL operates multi-purpose jetties and has good road and rail connections to industries in Maharashtra, Madhya Pradesh, Karnataka, and other states and can, consequently, help JSWIL expand its third-party volume.

PNPL also has adequate land to expand its capacity from 5 mntpa currently to 19mntpa. We reflect this acquisition in our estimates (1-2 per cent increase in FY25/26 EPS estimate) and revise our Mar’25TP to ₹255 (earlier ₹250), basis 18x FY26 EV/EBITDA. We believe that this strategic acquisition will grant JSW Infra access to more regions in the hinterland and expand the share of third party cargo.

Shares of Life Insurance Corporation of India (LIC) have been on the rise, gaining nearly 25 per cent in the last 15 days. On Wednesday the stock closed at ₹746 on the NSE, up 4.5 per cent (after hitting high of ₹750.80 earlier) on a slew of positive news, apart from its financial performance. The stock hit a 52-week high of ₹754.25 on December 20, 2022.

According to S&P Global Market Intelligence, LIC is the fourth largest insurer in the world, after Allianz SE, China Life Insurance Company and Nippon Life Insurance Company.

Marketmen have welcomed its recent launch of Jeevan Utsav.

Besides, the sharp rally in Adani group stocks also bode well for the public sector insurer, as it holds significant stake in those firms. Also, the general rally behind PSU stocks, following a significant win by the ruling BJP in the recent assembly elections, has helped LIC.

Post Q2 results, the brokerages, too, hiked price targets, while turning bullish. LIC recently posted a net profit of ₹17,469 crore in H1 FY24, the highest ever half-yearly profit.

Geojit Financials said with the gradual rise in domestic household savings, the share of life insurance in incremental household financial saving is expected to increase steadily. Adding that the company is positioned to benefit in the long-term, the brokerage firm said, “With an optimistic outlook, we reiterate our Buy rating on the stock, with a revised target price of ₹823, based on 0.65x FY25E EV per share.”

Emkay Global said the company is in a comfortable position to enhance its dividend distribution due to its strong solvency ratio of 190 per cent and solid surplus creation, amid relatively slower growth. It had increased the target price of the stock to ₹850 from the earlier ₹760.

The company reported that its value of new business (VNB) declined by 10.1 per cent year-on-year (y-o-y) in H1 FY24, while its VNB margin was stable at 14.6 per cent. In this regard, Geojit emphasised “the positive impact of the increasing share of the non-par business (+230bps y-o-y) and the favourable change in assumptions (+190 bps y-o-y) was nullified by the negative impact of competitive product pricing.”

“Even after the recent upmove in LIC shares, we maintain that our valuation remains attractive and prices-in structural challenges as well as any technical overhang around a likely stake-sale by the promoter,” Emkay added.

The brokerage firm further said a large part of equity investments in the non-par book are excess investments over the liabilities and will hence not cause any meaningful ALM risk/ volatility in the Available Solvency Margin, albeit will lead to EV volatility.

Despite the sharp run, the LIC stock is still ruling significantly lower to its IPO price of ₹949.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said the stock has witnessed a significant recovery from the important 200 period MA of ₹605 zone, to move past resistance at ₹690 levels, further strengthening the bias for a further rise in the coming days.

“The next hurdle is visible near the ₹755-758 zone of the previous peak, where it can find some resistance and probably some correction. Once the ₹755-760 zone is conquered, we expect further upside movement for higher targets of ₹790 and ₹830 levels in the medium term.

Nifty 50 continues to extend its run up today as well. It began today’s session with a gap-up at 20,808.90 versus yesterday’s close of 20,686.80. The index is now at 20,800, up 0.5 per cent at the end of the first hour of trade.

The breadth of Nifty 50 is giving it a bullish inclination – the advance/decline ratio stands at 32/18. All mid- and small-cap indices too are in the green today. Besides, barring Nifty IT, down 0.7 per cent, all other sectors have gained. 

Nifty PSU bank index, up 1.9 per cent, is the top gainer followed by Nifty Bank which has advanced 1.2 per cent powered by the public sector banks.

Nifty 50 futures

The December futures contract of Nifty 50 opened today’s session with a gap-up at 20,855.05 as against yesterday’s close of 20,798.90. It is now trading at 20,920, up 0.6 per cent.

The contract will most likely rally to 21,000 today. A breach of this will open the door for another leg of uptrend to 21,100.

On the other hand, if Nifty futures see a decline from the current level, the nearest support levels it can find are at 20,800 and 20,700.

Overall, the trend is bullish and so, if there is a fall in price, it is likely to be limited.

Trading strategy

Buy Nifty futures at the current level of 20,920. Add longs in case the price dips to 20,850. Place stop-loss at 20,800.

When the contract goes past 21,000, tighten the stop-loss to 20,940. Book profits at 21,080.

Note that this trade recommendation is for intraday. So, exit the position at the end of the session irrespective of where Nifty futures is trading at.

Supports: 20,800 and 20,700

Resistance: 21,000 and 21,100

Kotak Institutional Equity Research has identified several flaws in the valuation practices prevalent in the stock market.This has exaggerated the ‘fair’ values of stocks and understated potential risks to the business models of companies, it said.

“We note two broad problem areas on the disconnect between valuation approaches and business models and the inordinate focus on near-term earnings.

“These practices have persisted for a long time, resulting in a mistaken orthodoxy about valuations,” it said in a note.

In September, domestic brokerage firm Kotak Institutional Equities dropped its recommendation on mid-cap stocks as it could not find too many stocks beyond the BFSI space that offer decent potential upside to their 12-month fair value.

Read more:‘Growing disconnect between fundamentals and market valuations’

Ever since it stopped reommendation, the mid-cap has made many new highs. The Midcap index is up 39 per cent so far, compared to a 13 per cent rise in the Nifty50 index.

“The flaws prevalent in market for long enough to be treated as cardinal and correct investment rules when they are patently incorrect,” it said.

“In our view, the wrong valuation methodologies exaggerate ‘fair’ values of stocks (both down and up relative to ‘true’ fair values) and understate potential risks to business models,” it added.

Observations

According to the Kotak report, two broad errors include the use of historical multiples to value companies irrespective of their changing business modes and changing operating environments, and the use of composite multiples to value companies irrespective of the nature or provenance of earnings (India or overseas). The consumption-related sectors are prime examples of this oversight.

The market’s comfort with high multiples for high-growth but capex-intensive companies such as construction materials and specialty chemicals) is a discrepancy. The fair value of such businesses should be on the basis of free cash flow and discounted cash flow (DCF).

Read more: Market Valuations High, Consumer Trends Uncertain: How Should Investors Strategise?

A traditional DCF approach will likely show a much lower value. A multiple-based approach will most likely overstate the value of such companies in the high-growth phase.

“We note that several specialty chemicals companies have hardly generated any free cash flows over FY2014-23 and may not do so for the next few years either,” it said.

There has been propensity to use multiples for companies irrespective of the nature of earnings—recurring or non-recurring (limited-opportunity).

This results in ‘limited-opportunity’ earnings being treated as recurring earnings, it said.

“We see this problem in the electrification theme currently for electricity generation equipment suppliers and in the pharmaceuticals sector,” it said.

Motilal Oswal Asset Management Company aims to raise ₹1,000- 1,200 crore through the new small-cap fund offering to be launched on Tuesday. This will be the first NFO of an actively managed fund to be launched by the fund house in the last four years.

Small-cap funds have received a net inflow of ₹5,000 crore monthly, and about Rs 2,200 crore flows through SIP. Aided by steady inflow and strong run-up in stock prices, the categorisation of small-cap stocks starts from ₹R20,000 crore compared to ₹10,000 crore a few months back.

Small-cap space has grown substantially, with companies having a market capitalisation of ₹20,000 crore as small-cap compared to Rs 10,000 crore a few months back.

The fund house already has good exposure to small-cap stocks, with almost 30-40 per cent of its multi-cap fund invested in small-cap stocks. The small-cap fund will have a portfolio of 30 stocks, and investors are advised to come with a ten-year investment horizon.

Navin Agarwal, MD, Motilal Oswal AMC, said overall, the company has a significant 22 per cent investment in the small segment and is committed to staying ahead of the curve to deliver innovative solutions to investors.

Prateek Agrawal, Executive Director, Motilal Oswal AMC, said the fund house is committed to value investing and believes in the power of active management to capitalise on emerging opportunities that have opened up due to India’s growing economy.

Ajay Khandelwal, Fund Manager, Motilal Oswal AMC, said in the last 2-3 years, there has been a huge surge in small-cap fund flows, and this trend indicates a structural shift in investor preferences.

With their agility and growth potential, small-caps have become a focal point for discerning investors looking beyond conventional avenues, he said.

Adani International Container Terminal Private Limited (AICTPL), the joint venture terminal at the Adani Ports and Special Economic Zone (APSEZ) in Mundra, has handled over 3,00,000 containers in the month of November.

APSEZ has recorded cargo volumes of around 36 MMT in the same period, a robust 42 per cent y-o-y growth across three broad cargo categories – dry bulk (over 60 per cent y-o-y), containers (over 26 per cent) and liquids and gas (over 23 per cent).

As per the company’s regulatory filing, AICTPL has set record by handling 3,00,431 TEUs across 97 vessels in November 2023, breaking its own record of 2,98,634 TEUs in March 2021, by handling approximately 10,000 TEUs every day.

Two other ports of the company, Dhamra and Ennore, also recorded their ever monthly volumes at 3.96 MMT and 65,658 TEUs, respectively.

Logistics volumes continue to witness record growth with year-to-date (YTD) rail volumes of around 379,000 TEUs (over 23 per cent y-o-y) and GPWIS (general purpose wagon investment scheme) volumes of 12.3 MMT (over 44 per cent y-o-y). The highest-ever monthly GPWIS volumes were recorded in November 2023 at 1.72 MMT.

The stock trades at ₹862.95, up by 4.25 per cent on the NSE at 9:30 am on Monday, December 4.

I have purchased 500 shares of CESC in September 2021. My purchase price is around ₹87. What is the outlook for the stock? Can I continue to hold the stock?

Vijayan Kuttiadan, Kannur

CESC (₹100.50): The outlook is bullish. The trend is up since April this year. Support is around ₹95. The stock is unlikely to fall below ₹95. CESC share price can rise to ₹115 over the next three-five months. You can continue to hold the stock. Keep a stop-loss at ₹92. Move the stop-loss up to ₹101 as soon as the stock moves up to ₹106. Move the stop-loss further up to ₹108 when the price touches ₹111. Exit the shares at ₹115. The region around ₹115 is a very strong long-term trend resistance. As such, the chances are high for the current uptrend to end around ₹115.

So, we can expect the trend to reverse lower from around ₹ 115. So, you will have to exit your holdings at ₹115 rather than expecting for much higher levels. On the other hand, if it breaks below ₹95 from here itself and declines, exit all the shares at the above-mentioned stop-loss level of ₹92. But we see very less chances for that fall to happen. Instead, the preferred path of move would be to test ₹115 on the upside first and then see a reversal.

I have bought Laxmi Organic Industries at ₹251 as an investment. What is the outlook? Where can I accumulate this stock? What can be the target price to exit?

Devang Joshi

Laxmi Organic Industries (₹281.55): The stock has been broadly trading in a sideways range since May this year. The range of trade has been ₹245-320. Within this range, the bias is bullish. Immediate resistance is at ₹293. But the chances are high for the stock to break ₹293 and rise to ₹320 – the upper end of the range. From a slightly big picture, the chances are high to see an extended rise to ₹340. This can happen by the end of first quarter or early second quarter next year. The price action, thereafter, will need a close watch.

Failure to breach ₹340 can drag the share price below ₹300 again. A decisive break above ₹340 will be very bullish to revisit ₹400-levels over the long term. For now, keep a stop-loss at ₹235 and hold the stock. Move the stop-loss up to ₹285 when Laxmi Organic Industries’ share price rises to ₹310. Move the stop-loss further up to ₹320 when the price touches ₹335. If the price moves above ₹340, hold the stock and exit at ₹400. Else the stock turns down from ₹340, exit at ₹320 as mentioned above.

I have shares of Kiri Industries. My purchase price is ₹360. What is the outlook for this stock? Should I continue to hold the stock or exit and book loss?

Devanshu Mohata

Kiri Industries (₹292.35): The stock has been stuck below ₹300 since April this year. On the chart, there is no sign of strength. The immediate outlook is mixed. The stock price can go either way. A decisive rise above ₹300 can take it up to ₹400-420. On the other hand, a fall below ₹260 can drag Kiri Industries’ share price down to ₹200. From a big picture perspective, the stock has been broadly range bound between ₹200 and ₹700 since 2017.

Considering this, there could be chances of the downside being limited to ₹200. So as long as the stock holds above ₹200, there are chances to see a rise back to ₹700. This is assuming that the range is intact. But even if the rise to ₹700 happens again, it may take a long time. So, it won’t be worth the wait. As such, we suggest you to exit the share at the current levels and accept the loss.

Send your questions to [email protected]

Investors with a minimum time frame of one year can buy the shares of Granules India (₹392.70). The stock surged over 20 per cent last month. This has taken the share price well above the key resistance level of ₹360. It also marks the end of the shallow downtrend since December 2020. The moving average indicators on the short-term charts are giving out positive signals. They indicate that the downside could be limited, and dips will likely be bought. That also strengthens the bullish case for the stock. The region between ₹360 and ₹340 will be the first support zone. Below that ₹310-300 is the next significant one. We can expect the downside to be limited to ₹360 itself going forward. Granules India’s share price can rise to ₹600-630 over the next six quarters. Long-term investors can buy Granules India now. Accumulate on dips at ₹370. Keep a stop-loss at ₹280. Trail the stop-loss up to ₹440 as soon as the stock price moves up to ₹510. Move the stop-loss further up to ₹490 when Granules India’s share price touches ₹560. Exit the shares at ₹600. 

Escorts Kubota is forming a head and shoulder pattern. Can I buy a put option?

Muthukumar

Escorts Kubota (₹3,205.2): The stock has largely been moving in a sideways trend since September. It has been held between ₹3,000 and ₹3,450 for the past three months.

The daily chart shows that Escorts Kubota is in the process of forming a head and shoulder (H&S) pattern. As it stands, the pattern is not confirmed, and we cannot be certain that it will happen. So, buying a put option at this juncture is not ideal.

Instead, you can consider a short strangle options strategy if you are comfortable with the margin obligations. Since the stock of Escorts Kubota continues to chart a sideways trend, executing short strangle can be beneficial.

Implement this strategy by simultaneously selling 3450-call and 3000-strike put options. These options closed at ₹37.10 and ₹26.05 respectively on Friday. So, selling one lot each can result in you receiving ₹63.15 as premium. Since the market lot of this stock is 275 shares, ₹63.15 premium means an inflow of ₹17,366.25.

Hold both these options until expiry. But here is the exit plan should Escorts Kubota’s stock move out of the range. If it breaks out of the resistance at ₹3,450, exit the short position on 3450-call and continue to hold 3000-put short until expiry.

On the other hand, if the stock slips below the support at ₹3,000, it will confirm the H&S pattern. According to this, a break of ₹3,000 can lead to a fall to ₹2,550. So, if Escorts Kubota’s share price slips below ₹3,000, exit short strangle — liquidate both 3450-call and 3000-put short position.

After exiting the shorts, you can consider buying either 3000- or 2900-strike put options. Decide between these two strikes based on the option premium and your risk appetite. Exit this when the option price doubles.

Consider December expiry puts if the breach of the support at ₹3,000 happens in the first half of this month. In case the stock breaks the support in the second half of December, we advise to go for January puts so that you can avoid time decay to a large extent.

Send your queries to [email protected]

As expected, shares of Flair Writing Industries made a big bang debut on the exchanges on Friday. Against the IPO price of ₹304, the stock opened at 503, a premium of 65.40 per cent, on the BSE. The stock rose further to ₹514 but could not sustain the gains and closed at ₹452.70 — still a gain of 49 per cent over the IPO price. On the NSE also, it closed at the lower circuit at ₹450.10, after opening firm at ₹501.

The issue was one of the star attractions last week and was subscribed 46.6 times. The company had raised ₹593 crore — a fresh issue worth ₹292 crore and an offer-for-sale (OFS) of ₹301 crore worth shares by the Rathod family.

The IPO was subscribed 13 times in the retail category and 33.37 times in Non-Institutional Investors’ portion. QIB portion was subscribed whopping 115 times.

Also read: Tata Technologies blockbuster listing: Why IPO investors can’t have the cake and eat it too 

Ahead of the issue, the Mumbai-based writing instruments manufacturing company mobilised ₹177.9 crore from anchor investors.

Flair will utilise the proceeds to set up a new manufacturing facility for writing instruments in Valsad for ₹55.99 crore. Further, it will spend ₹86.75 crore on capital expenditure and ₹77 crore on working capital requirements. The company will repay the debt amounting to ₹43 crore from the fresh issue proceeds, and the remaining funds will be used for general corporate purposes.

Analyst’s call

Rajan Shinde, Research Analyst, Mehta Equities, said the healthy listing is justified on the back of high growth seen in the writing instruments and stationery segment, diversification into housewares, steel bottles and appliances and ongoing expansion plans to tap the future growth.

Also read: Should your IPO investment be based only on grey market premium?

While long-term investors can Hold considering healthy growth prospects, conservative short-term IPO investors can book profits, he said.

The benchmark 50-share Nifty surged to a record high on Friday on the back of better-than-expected GDP numbers, buying by foreign investors and positive global cues.

Nifty rose for the fourth straight session to close at 20,267, up 135 points or 0.67 per cent, and register its fifth consecutive weekly gain. The Sensex rose 0.7 per cent to end at 67,481.

All sectors, except auto, ended in green, with FMCG, financials, realty and PSU banks the top gainers. Defense stocks were in focus after government approved ₹2.23-lakh crore defense acquisition projects. ITC (3.2 per cent) and NTPC (2.9 per cent) were the top Nifty gainers.

Advantage India

India remains a bright spot in an uncertain global economic environment, with a better-than-expected year-on-year GDP growth rate of 7.6 per cent for the September quarter. The country’s manufacturing sector activity continued to expand in November, with the S&P Global Purchasing Managers’ Index rising to 56.0 from 55.5 the previous month.

External factors such as falling US bond yields, easing inflation and potential Federal Reserve rate cuts next year also kept the markets in good stead.

Also read: Tata Technologies blockbuster listing: Why IPO investors can’t have the cake and eat it too 

“Indian equities gained for the fifth consecutive week driven by strong economic data, healthy corporate earnings and cheerful festive season. Return of FPIs, multiple upgrades of India’s economic growth by global firms, added to the overall positivity,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

FPIs bought shares worth ₹1,589 crore on Friday, provisional data showed. The investors turned buyers in November after two months of selling, shopping for equities worth over $1 billion.

“The capex by the government and the pick-up in manufacturing activity, led the capital goods and infra stocks to outperform. The global market, too, rallied on hopes that the ECB has completed its rate-hiking cycle on the back of easing inflation and ahead of the FED chair speech today. Oil prices continued to move loser despite the OPEC+ supply cut, which will support the H2FY24 operating margins of the corporations. The auto sales numbers witnessed a festival cheer, while the premium valuation restricted the upside potential,” said Vinod Nair, Head of Research at Geojit Financial Services.

Also read: Should your IPO investment be based only on grey market premium?

Asian indices traded mixed on Friday, with the Hang Seng and Kospi slipping by more than 1 per cent each. European indices were trading in the green.

There is no indication of any reversal pattern unfolding at the highs for the Nifty, which formed a long bull candle on the weekly chart.

“The short-term trend of Nifty continues to be positive, and one may expect further upside in the coming week. The next upside levels to be watched is around 20,510, with immediate support at 20,140,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Zydus Lifesciences Limited’s shares were up by 0.56 per cent after the company received final approval from the United States Food and Drug Administration (USFDA) for Ivabradine Tablets, 5 mg, and 7.5 mg (USRLD: Corlanor® Tablets, 5 mg, and 7.5 mg).

Ivabradine is approved to mitigate the risk of hospitalisation for worsening heart failure in adult patients with stable, symptomatic chronic heart failure featuring reduced left ventricular ejection fraction. Additionally, it is indicated for the treatment of stable symptomatic heart failure due to cardiomyopathy in children aged 6 months and older. The manufacturing of the drug will take place at the group’s formulation manufacturing facility in Ahmedabad SEZ, India.

• Also Read: Zydus Lifescience receives USFDA approval for Erythromycin

Zydus, among the initial ANDA applicants for Ivabradine Tablets, 5 mg, and 7.5 mg, may be eligible for 180 days of shared generic exclusivity, having submitted a complete ANDA with a paragraph IV certification. The drug had annual sales of USD 136.5 million in the United States (IQVIA MAT October 2023).

Zydus reported, with this approval, the company now holds a total of 382 approvals and has submitted over 448 ANDAs since the initiation of the filing process in FY04 as of 30th September 2023.

Shares of Rockingdeals Circular Economy made a strong debut at the NSE-Emerge on Thursday as the stock closed at ₹315 — a gain of 125 per cent over the IPO price of ₹140. The IPO was subscribed over 213 times last week. Rockingdeals specialises in bulk trading of excess inventory, open-boxed inventory, re-commerce products, and refurbished products.

The company had raised over ₹21 crore through the IPO by issuing 15 lakh shares. Proceeds from the issue will be utilised towards working capital requirement, brand positioning, marketing, advertising, and general corporate purpose, it said.

The equity markets initially demonstrated a bullish trend at the Thursday opening, only to experience a swift downturn in the afternoon. Both the Nifty and the Sensex recorded losses during mid-market trading, shifting the indices negative.

The NSE Nifty was down by 0.19 per cent or 37.45 points to 20,059, while the BSE Sensex slipped down by 0.25 per cent or 165.89 points to 66,736. A total of 3,748 stocks were traded on the BSE, of which 1,805 advanced, while 1,781 declined and 162 stocks remained unchanged. As many as 290 stocks hit a 52-week high and 15 stocks hit a 25-week low at 1 pm on Thursday.

Shrey Jain, Founder and CEO, SAS Online – India’s Deep Discount Broker, said, “The market is starting the day with a subdued yet cautious tone following yesterday’s impressive trading session. As we approach today’s expiry, there’s an anticipation that the Nifty’s positive momentum will persist, propelling it towards the 20250 levels.”

• Also read: Tata Technologies IPO: Surges 140% on stellar stock market entry

He further added, “Notably, the 20,000 Put strike on the downside holds substantial Open Interest (OI), expected to serve as a limiting factor against potential declines. In Bank Nifty, a narrow trading range was sustained, with 43,500 serving as a pivotal level. Additionally, for the monthly settlement, there is noteworthy option writing observed at both the Put 43,500 and Call 44,000 strikes.”

Major gainers on the BSE include India Cements, The New India Assurance Company, Camlin Fine Sciences, Great Eastern Shipping Co, and Latent View Analytics with gains ranging from 7.90 per cent to 5.64 per cent. Major losers on the BSE include Cressanda Solutions, Aster DM Healthcare, Aether Industries, and Sterlite Technologies with losses ranging from 4.89 per cent to 2.82 per cent.

BSE MidCap (0.35 per cent) and BSE SmallCap (0.45 per cent) indicated gains.

Stocks that hit a 52-week high on the NSE include 63 moons technologies, Ahluwalia Contracts (India) Limited, 360 ONE WAM Limited, Ajanta Pharma Limited, and Alkem Laboratories Limited.

Stocks that hit a 52-week low on the NSE include Aether Industries Limited, Blue Jet Healthcare Limited, Bohra Industries Limited, Fedbank Financial Services Limited, and Gandhar Oil Refinery (India) Limited.

“Overall market sentiments remain optimistic, driven by a consistent trend of Foreign Institutional Investors (FIIs) turning buyers for five consecutive days, coupled with aggressive buying from Domestic Institutional Investors (DIIs),” said Shrey Jain.

Chinese major Alibaba group’s investment arm has exited from Zomato on Wednesday. According to bulk deal data on the BSE, Alipay Singapore Holding Pte Ltd, an arm of Alibaba, sold 29.60 crore shares at an average price of ₹112.70. This represents a 3.44 per cent stake in Zomato.

A part of the selling (about 4.40 crore shares) was absorbed by Morgan Stanley Asia (Singapore) Pte Ltd. However, details of other buyers were not known immediately. With this selling, Alipay Singapore has completely exited from the food retail major.

However, Alibaba Group owns 6.39 per cent stake in Zomato through Antfin Singapore Holding Pte. Ltd.

It may be recalled that Japanese conglomerate Softbank, through its affiliate SVF Growth (Singapore) Pvt Ltd, last month had sold 1.09 per cent stake Zomato for ₹1,040 crore through an open market transaction. Earlier, In August too, Softbank offloaded a 1.16 per cent stake in Zomato for ₹947 crore through an open market transaction.

However, shares of Zomato closed 2.55 per cent higehr at ₹116.70 on the BSE.

In a resent research report, domestic brokerage Motilal Oswal Financial said: “We remain positive about the long-term growth opportunity for Zomato and do not expect competition to intensify further despite the entry of ONDC in the space.” It reiterated its Buy rating on Zomato with a target price of ₹135.

Ramco System Ltd.’s shares were up by 2.95 per cent after the company announced a partnership with Deloitte Touche Tohmatsu India LLP to deliver a global payroll solution, combining technology and advisory services. The company reported, the collaboration aims to enhance operational efficiency, compliance, and user experience across more than 150 countries through a unified platform. 

Rohit Mathur, SVP & SBU Head, HR and Payroll, Ramco Systems, said, “Right from being our payroll compliance partner offering us technical advice on country-specific regulatory requirements impacting payroll and statutory compliances, our association with Deloitte has come a long way, and we are now leveraging their expertise across multiple facets. I’m confident that this partnership along with our investments in high-end technologies like low-code framework, lightning-fast in-memory payroll, and AI-powered validations & analytics will prove to be the gamechangers.”

The shares were up by 2.95 per cent to Rs 284.65 at 12.35 pm on the BSE.

Target: ₹200

CMP: ₹169.45

FSN E-Commerce Ventures (Nykaa) is on track to post healthy gross merchandise value (GMV) growth of 27 per cent y-o-y in Q3-FY24 in its online Beauty & Personal Care (BPC) segment, following: the positive impact of festival & wedding seasons, and the surge in November Pink Sale (about 30-35 per cent higher sales y-o-y).

Basis above, Nykaa BPC could report GMV growth of 24.8 per cent for 9M-FY24, which is largely in line with our annual estimates of 25 per cent in FY24. Increasing number of transacting users would continue to be a growth driver for Nykaa online BPC GMV, as average order value (AOV) will see growth of a mere 2-3 per cent y-o-y, and frequency-led growth too would be low, as most brands (D2C and large brands) make high volume packages (500ml and above).

Our checks show India’s online BPC market has about 40 million transacting customers across platforms (including e-commerce giants) whereas Nykaa has a mere 10.7 million, which, in turn, provides an opportunity to grow this base.

Given the stock has run-up 25% in the past month, there is limited upside from current levels. We retain our TP of INR but revise our rating to Accumulate from Buy, given concerns on increased competition and limited levers for margin improvement in the BPC space.

United Breweries Ltd.’s shares were up by 1.31 per cent after the company announced the launch of Heineken Silver Draught Beer. This debut of Heineken’s draught beer in India aims to offer consumers a premium and smooth tasting beverage tailored for social occasions. The beer is available in select premium pubs and bars, with plans for further market launches in the coming months.

The company reported, Heineken Silver Draught Beer, crafted by brewers using natural ingredients including Heineken’s unique A-yeast and 100 per cent malt, promises the freshest and smoothest taste. The malt brew ensures an enhanced drinking experience with a perfectly balanced taste and freshness.

• Also Read: United Breweries: Why it’s time to sell the stock 

Jacqueline Van Faassen, Head of International Premium Portfolio at Heineken India, said, “Our dedication to perfection is evident at every stage of the brewing process. Quality is paramount, and our longer brewing process as compared to other lager beers, horizontal fermentation, combined with 150 years of craftsmanship, ensures a consistently balanced Heineken beer with an unmatched taste and stability.

The shares were up by 1.31 per cent to ₹1605 at 12.50 pm on the BSE.

Ramkrishna Forgings Ltd has taken a step towards carbon neutrality with its investment in renewable energy. The company has partnered with Prozeal Green Energy Private Ltd to install a 7.82 MWp Solar PV Project. Currently, 5.2 MWp solar capacity is operational, with the remaining 2.62 MWp expected to go online soon. The move aligns with the company’s commitment to environmental responsibility and sustainability, marking a step towards reducing its carbon footprint. Ramkrishna Forgings aims to create a more sustainable future through clean energy initiatives.

Lalit Kumar Khetan, Whole-Time Director & CFO, Ramkrishna Forgings Ltd said, “Our decision to invest in renewable energy and collaborate with PROZEAL reflects our dedication to environmental responsibility and sustainability. We believe in the power of clean energy to drive positive change and through initiatives like these, we can create a more sustainable future for generations to come.”  

The shares were up 0.45 per cent at Rs 757 at 1.42 pm on the BSE.

Equity benchmark indices Sensex and Nifty closed with modest losses for the second straight session on Friday, following selling in IT stocks amid a lack of fresh buying triggers.

In a highly volatile trade, the 30-share BSE Sensex declined 47.77 points or 0.07 per cent to settle at 65,970.04. During the day, it gyrated 207.59 points, hitting a high of 66,101.64 and a low of 65,894.05.

The Nifty slipped 7.30 points or 0.04 per cent to 19,794.70.

Among the Sensex firms, HCL Tech, Wipro, Tata Consultancy Services, Tech Mahindra, Nestle, Tata Motors, Infosys, Bharti Airtel, UltraTech Cement and Tata Steel were among the laggards.

Also read: Rupee declines to record closing low, tad down on week

On the other hand, Axis Bank, HDFC Bank, ICICI Bank, JSW Steel, Mahindra & Mahindra and Kotak Mahindra Bank were the major gainers.

In Asian markets, Tokyo settled in the green while Seoul, Shanghai and Hong Kong ended lower.

European markets were trading mostly in the positive territory. The US markets were closed for Thanksgiving holiday on Thursday.

Global oil benchmark Brent crude climbed 0.18 per cent to $81.57 a barrel.

Foreign Institutional Investors (FIIs) bought equities worth ₹255.53 crore on Thursday, according to exchange data.

The BSE benchmark dipped 5.43 points or 0.01 per cent to settle at 66,017.81 on Thursday. The Nifty slipped 9.85 points or 0.05 per cent to 19,802.

The Nifty Transport index, dominated by auto and auto-ancillary components, has long been in the limelight. However, the attention of investors is gradually shifting towards the Transportation and Logistics sector, spurred by recent fund launches from prominent houses.

• Also read: QIP issuances surge in H2 as financials shore up growth capital

Aditya Birla Sunlife Mutual Fund (Aditya Birla Sunlife Transportation and Logistics) and HDFC Mutual Fund (HDFC Transportation and Logistics Fund) are the latest entrants to this club, managing assets in the range of ₹5,500-6,000 crore.

In this landscape, the UTI Transportation and Logistics Fund stands as the oldest player. Currently, there are five schemes, including ICICI Prudential Transportation & Logistics Fund and Bandhan Transportation & Logistics (formerly IDFC Mutual Fund), based on this theme, along with the Nifty Transportation & Logistics.

While UTI fund has displayed a commendable CAGR of over 15 per cent since inception, the relatively new ICICI Transport, launched last October, boasts an impressive 33 per cent return in the last year.

However, a noteworthy aspect is the Nifty Transportation & Logistics index’s heavy reliance on auto and auto-ancillary companies (such as Tata Motors, M&M, Maruti, TVS Motor, MRF, Sundram Fasteners, Bajaj Auto, CUMI), overshadowing pure logistics players. Understandably, the exposure of these companies to logistics is minimal due to their low market-cap and performance metrics.

Growth prospects

Looking beyond the index, the Indian and global logistics market presents a substantial addressable opportunity, projected to reach approximately $385 billion by fiscal 2027, growing at a 13 per cent CAGR from fiscal 2022-27. Global projections are even more staggering, estimated to hit $13.6 trillion by 2026, growing at a 6.7 per cent CAGR from 2020-26. These figures, quoted in an IPO paper by TVS Supply Chain Solutions, relying on Armstrong & Associates Inc and Redseer, underline the vast potential in the sector.

• Also read: Concern on market valuation unwarranted: Birla MF

However, amidst this optimistic outlook, it’s crucial to acknowledge challenges. Trade issues and the lingering effects of the Covid-19 pandemic have highlighted the intricate nature of supply chains. Consequently, there is a rising trend towards end-to-end outsourcing, with organisations increasingly seeking supply chain companies not only for supply chain and logistics management but also for additional specialised services.

The logistics industry, marked by intense competition and a multitude of unorganised players, grapples with fragmentation, especially in commoditised segments. Success stories of Singapore-based CapitaLand Ltd, WelspunOne, ESR India, IndoSpace, and others raising funds for logistics with a focus on warehousing, indicate a specific trend. Traditional logistics players are expected to shift their focus towards lucrative warehousing spaces.

For instance, Allcargo Gati recently announced the establishment of a Surface Transhipment Centre and Distribution Warehouse (STCDW) at Mayasandra, Karnataka.

ICRA anticipates a positive demand scenario for the road logistics sector in FY2024, propelled by stable domestic consumption and investment demand. The industry’s revenue growth is estimated at 6-9 per cent in FY2024, building on the elevated base of FY2023. This growth is fuelled by demand from diverse segments, including e-commerce, FMCG, retail, chemicals, pharmaceuticals, and industrial goods. The industry’s shift towards organised logistics players, post-GST and e-way bill implementation, further contributes to this upward trajectory.

While the inclusion of pure logistics players in the index might not be imminent, the sector is heading towards intriguing times, poised to shine alongside India’s growth story.

In conclusion, navigating the promising yet complex Transportation and Logistics sector demands a nuanced comprehension of both its potential and challenges. As investors venture into this realm, adopting a diversified approach and staying abreast of the industry’s dynamics will be key for navigating the exciting days ahead.

Benchmarks ended in red for the second day in a row. While BSE Sensex lost 47.77 points to 65,970.04, NSE Nifty closed 7.30 points lower to 19,794.40 in a range-bound trade due to absence of major triggers and extended weekend.

Losses in IT majors were off set by gains in financial stocks and growing confidence of foreign institutional investors (FII) in the market. According to exchange’s provisional data, FIIs bought equities worth ₹2,625.21 crore on Friday against ₹255.53 crore on Thursday.

Also read: Goldman Sachs sees Nifty50 at 21,800 by 2024-end

Analysts observed that market has been consolidating for the last few sessions and the momentum is likely to return next week with cues from economic data, including GDP data of the major economies such as the US, China and India. Markets will remain closed on Monday on account of Guru Nanak Jayanti.

Top gainers, losers

Within the Sensex pack, Axis Bank (0.91 per cent), JSW Steel (0.81 per cent), HDFC Bank (0.68 per cent) and ICICI Bank (0.66 per cent) were the top gainers. On the other hand, HCL Tech (1.55 per cent) was the top loser followed by Wipro (1.54 per cent), TCS (1.46 per cent), Nestle India (1.04 per cent) and Tech Mahindra (0.99 per cent).

Broad market

BSE SmallCap gained 0.14 per cent, followed by BSE MidCap (0.13 per cent) and BSE 500 (0.01 per cent).

Among the sectoral indices, BSE Capital Goods advanced 0.59 per cent followed by BSE Utilities (0.54 per cent) and BSE Healthcare (0.53 per cent), while BSE Teck (0.89 per cent) and BSE Information Technology (0.88 per cent) were the major laggards.

Market Breadth

Of the 3,814 stocks traded on BSE, 1,752 advanced, 1,948 declined and 114 stocks remained unchanged.

While 273 stocks hit 52-week high, 23 stocks hit 52-week low.

Wedding related stocks

Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd, observed that sectors such as jewellery, apparel, hotels, and aviation are likely to gain traction due to the current wedding season.

According to the Confederation of All India Traders (CAIT), about 35 lakh weddings are expected to be solemnised between November 23 and December 15. It estimates ₹4.25-lakh crore to flow into the economy on the back of spending on wedding-related purchases and services.

‘Weak global cues’

Vinod Nair, Head of Research at Geojit Financial Services, said the benchmark index traded on a tepid note following the weak German growth data, and trading volume was limited due to the US market holiday on account of Black Friday.

Also read: Analysts see robust yield from agrochemical stocks

“The US manufacturing PMI data for November is expected to be below forecast, summarising caution in the short-term,” he added.

Target: ₹352

CMP: ₹287.30

In the second quarter of the fiscal year 2023-24, RailTel Corporation of India Ltd. (RAILTEL) reported strong financial performance. Revenue from Operations grew to ₹599.10 crore, up 40 per cent y-o-y and 28 per cent q-o-q, driven by segment growth in the railway and data center services.

EBITDA stood at ₹115.30 crore, up 15 per cent y-o-y and 55 per cent q-o-q. EBITDA margins improved to 19.3 per cent q-o-q up 338 bps but decreased 417 bps. EBITDA margins are set to strengthen in the upcoming quarters due to increased revenue growth and the

benefit of operating leverage. Meanwhile, it’s expected that the Profit After Tax (PAT) will maintain a steady rate of 9-10 per cent. The reported PAT stood at ₹68.10 crore, showing a noteworthy 23.4 per cent y-o-y increase and a substantial 77.5 per cent increase when compared to the previous quarter, indicating a noticeable enhancement in profitability.

We revise a ‘Buy’ rating for Railtel, setting a target price of ₹352 with a P/E of 32.6x using forecasted EPS of ₹10.8 (FY25). The factors contributing to this recommendation encompass the projects & data center service segment growth momentum, a robust order book, and the enhancement of profit margins, all of which combine to bolster overall profitability.

Target: ₹1,150

CMP: ₹1,008.15

Axis Bank hosted an Analyst Day to demonstrate its progress at future-proofing the franchise on both sides of the balance sheet. Although Axis Bank has benefitted from margin tailwinds in a rising interest rate regime (+62bps NIM expansion over the past six quarters), we believe there is still significant ground to be covered in terms of enhancing the quality of its deposit franchise and catching up with its larger private sector banking peers.

While Axis Bank is likely to sustain its investments in focus areas, resulting in elevated opex ratios, the bank is also building out high-yielding profit pools on the acquired businesses (Citi portfolio) by leveraging its digital initiatives and ecosystem partnerships to drive productivity gains.

Given its untenable loan-deposit ratio (H1FY24: 94 per cent), our forecasts build a sharp growth deceleration, reflecting in loan and deposit CAGR of 14 per cent and 13 per cent over FY23-FY26. While we expect near-term RoAs to react to deposit repricing and risk weight changes, we are constructive on the potential medium-term RoEs. We maintain BUY with a TP of ₹1,150 (standalone bank at 2.0x Mar-25 ABVPS), a 30 per cent discount to ICICI Bank.