In the week gone by, global stock markets rallied as investors cheered the prospect I of more fiscal stimulus to support a pandemic-damaged U.S. economy, with more data pointing to a slowing labor market recovery. The number of Americans filing new claims for jobless benefits declined more than expected last week, though they remain extremely high indicating a slowdown in the labour market. The final debate between President Donald Trump and his Democratic challenger Joe Biden on Thursday night presented few surprises for election watchers but slightly reinforced investor caution heading into the November 3 polls. China's economy continues its recovery from the Covid-19 pandemic according to its latest official figures. The world's second-biggest economy saw growth of 4.9% between July and September, compared to the same quarter last year. China is now leading the charge for a global recovery based on its latest gross domestic product (GDP) data. Recently, Britain and Japan formally signed a trade agreement, marking Britain's first big post-Brexit deal on trade, as it continues to struggle to agree on a deal with its closest trading partners in the European Union.
Back at home, domestic market moved higher on the back of sustained foreign fund inflows and positive cues from global markets. And also the news that government is open to further stimulus measures to boost the coronavirus-hit economy, boosted the sentiments of the market participants. Actually, the government is gearing up for a demand stimulus including infrastructure spending and a possible package for the hospitality sector. India has opposed binding commitments on countries to put in place practices for faster clearances of cross-border merchandise even as it has implemented almost 75% of its commitments ahead of schedule under the global trade facilitation agreement (TFA). Investors are also closely tracking ongoing Sept quarter earnings reports to get a clear picture of the disruption caused by the coronavirus pandemic-induced lockdown. Going ahead market will continue to track global as well as domestic factors for its further direction.
On the commodity market front, Commodities traded in a range in a tight spread and CRB closed near 151 levels. Investors kept their focus on the U.S. Congress’ progress towards passing the latest stimulus measures before the Nov. 3 presidential election. A weaker U.S. dollar, rising inflation risks and demand driven by additional fiscal and monetary stimulus from major central banks will spur a bull market for commodities in 2021. Before US election, gold is expected to see some buying but upside may be capped near 52200 whereas silver may trade in a range of 60000-64500 levels. Crude is in a tight range at present and likely to stay in a range of 2850-3150. Ifo Business Climate and Unemployment Rate, Inflation rate, GDP of Germany, Durable Goods Orders, Consumer Confidence, Core PCE Price Index, PCE Price Indexand GDP of US, Interest Rate Decision by Canada, BoJ andECB, ECB Press Conference, GDP of Spain, Core Inflation Rate and GDP of Euro Zone, GDP of Italy and many more data and events are scheduled this week and collectively outcome is expected to be on positive side and it may get reflect in commodities prices.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBIregistered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.
SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
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SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.
The company has been working on charting its next phase of growth for which monetization of various non-core assets like SED (strategic Engineering Division) & other cross holdings is underway to improve the balance sheet. The Proceeds will be used to reduce debt level and get the balance sheet back to healthy. Thus, it is expected that the stock will see a price target of Rs.69 in 8 to 10 months’ time frame on an expected P/BV of 1x and FY21 BVPS of Rs.69.36.
With healthy balance sheet, efficient operations, favourable regional dynamics, and attractive valuation, the company looks promising. The company had witnessed improving demand environment in June and July, with July demand better than last year. The strong rural sector’s demand supported by both pent-up demand and new demand had led to overall improvement in the demand environment. The company has been focusing on deleveraging and plans to repay in FY21 and FY22. Thus, it is expected that the stock will see a price target of Rs.368 in 8 to 10 months time frame on a current P/BV of 2.03x and FY22 BVPS of Rs.181.45.
The stock closed at Rs 149.80 on 23rd October 2020. It made a 52-week low at Rs 73.40 on 24th March 2020 and a 52-week high of Rs. 196.75 on 01st November, 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 128.79
After registering yearly low of 73.40 levels, stock recovered sharply and trading in higher highs and higher lows sort of “Rising wedge” on weekly charts which is considered to be bullish. Last week, stock has given the pattern breakout by registered gains over 16% and also has managed to close above the same so buying momentum may continue for coming days. Therefore, one can buy in the range of 145-147 levels for the upside target of 165-170 levels with SL below 136.
The stock closed at Rs 188.15 on 23rd October, 2020. It made a 52-week low of Rs 95.15 on 23rd March, 2020 and a 52-week high of Rs. 191.95 on 15th September, 2020. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 147.08
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, it was formed an “Inverted Head and Shoulder” pattern on weekly charts, which is bullish in nature. Last week, stock has given the neckline breakout of pattern along with high volumes so buying momentum may continue for coming days. Therefore, one can buy in the range of 184-186 levels for the upside target of 205-210 levels with SL below 170 levels.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
SOURCE: RELIABLE SOFTWARE
Charts by Reliable software
Indian Markets ended the week on a positive note with Bank Nifty taking a lead on the back of sharp gains in HDFC twins, ICICI Bank and Axis bank while Nifty also managed to gain more than a percent during last week. From derivative front, tug of war among bulls and bears remained as call writers added hefty open interest at 12000 strike while put writers at 11800 & 11900 strike gave support to Nifty. For coming week, we expect markets to remain volatile and traders should focus in stock specific moves. The Implied Volatility (IV) of calls closed at 21.33% while that for put options closed at 22.39 The Nifty VIX for the week closed at 22.64%. PCR OI for the week closed at 1.24 down from the previous week indicating put unwinding. From technical front as well oscillators suggests that market is likely to consolidate in range of 11800 to 12000 levels. However the bias is likely to remain bullish, so any dip into prices should use to create fresh longs.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric futures (Nov) is expected to trade sideways to up in the range of 5900-6150 levels. On the spot, the prices are stable amid steady buying interest shown by the stockists. In the present scenario, that turmeric prices are well-supported on the view that the recent heavy rains in the Telangana region may have damaged the standing crop. The buyer traders after examining the samples are purchasing limited stock for their immediate requirement. The traders feel the Diwali sale may commence by next week after the Durga Puja. Farmers also brought only medium quality turmeric. In days to come, if the demand increases the farmers may bring some good quality turmeric for sale. At the Erode Cooperative Marketing Society, the finger turmeric was sold at Rs.5,259 to Rs.6,014 a quintal, the root variety was sold at Rs.4,769 to Rs.5,724 a quintal. Jeera futures (Nov) is likely to remain stable in the range of 13800-14800. On the spot, while jeera prices continue to decline in Unjha, it is rising at Rajkot mandi of Gujarat. The arrivals are increasing as farmers offloaded old stocks before the commencement of sowing. However the bias has been positive due to festive demand as well as export buying. Dhaniya futures (Nov) may witness consolidation in the range of 6600-6900. Unfavourable weather has reduced the arrivals in key coriander markets of Rajasthan. Buyers from Gujarat, Andhra Pradesh and Karnataka were quite active as well. However, the buyers are not getting satisfied with the quality of the spice. Lower and medium qualities are arriving in the mandis in large quantities. Upper range supplies were scarce despite good demand and rates.
Bullion counter edged up on hopes that a U.S. stimulus package would eventually be passed, boosting the metal’s appeal as an inflation hedge, although a stronger dollar capped gains. Concerns over rising COVID-19 cases and the increasingly likelihood of a democrat win in the U.S. election, which is likely to result in greater stimulus and weaken the dollar, are helping gold rise. House Speaker Nancy Pelosi on Thursday said negotiators were making progress in talks with the White House over the coronavirus fiscal aid package and a deal could be reached “pretty soon”. Market focus now shifts to the Nov. 3 U.S. presidential election after President Donald Trump and Democratic challenger Joe Biden offered sharply contrasting views on the pandemic at final presidential debate. The dollar index fell to a one-month low against its rivals, making gold less expensive for holders of other currencies. There, however, appears no definite clarity on the continued shifting of positions on the stimulus relief bill which shorter-term traders can price into the precious metals market. Gold, considered a hedge against inflation, currency debasement and uncertainty, has gained 25% this year, driven by massive global stimulus to cushion economies from the pandemic-induced slump. With time fast running out, Britain and the European Union began intensified daily talks, in a final push for a Brexit deal. Holdings of the largest gold-backed exchange-traded-fund (ETF), the SPDR Gold Trust, fell to 40.8 million ounces. This week, gold may trade in the range of 48800-53600 and Silver may trade in the range of 57200-65100. Whereas on COMEX gold may trade in the range of $1870-$1950 and Silver may trade in the range of $21.60-$27.10.
Looking from the positional view, the bullishness is likely to prevail in near term on soybean futures amid news crop damage and prospects of higher soymeal exports on the back of positive crush margin. The November contract has more room for upside to test 4500 taking support near 4200 levels. On the spot, soybean is continuing in Indore and other mandis in Madhya Pradesh on strong global cues, improved buying and weak availability of soya seeds with crushers. Soybean prices in Indore mandis is being quoted at Rs.4,190-4,200. On CBOT, prices hit a more than four-year high of $10.85-1/4 a bushel. According to weekly export inspection data, volumes for soybeans have been larger than in any other year in every week so far in the 2020-21 marketing year. Last week, mustard futures on the national bourse saw a life time high of Rs. 5870 per quintal amidst declining arrival due to suspension of sale by NAFED, and strong buying support from millers anticipating a shortage till the new Rabi crops hits the market next year. Weak availability of mustard seeds with the crushers also lifted plant deliveries of mustard seeds for Jaipur line to Rs. 5,900-5,905 a quintal. Tracking the bullish fundamentals, the November contract is likely to witness an extension of this bull-run towards 5900-6000. The rally of soy oil futures (Nov) may incline further to test 980-990, and CPO futures (Nov) may rise towards 815-825 levels, respectively. The fundamentals are very supportive amid strong demand of soy oil from China as it had been stocking for food security purposes and forecast of declining output of palm oil in Malaysia.
Crude oil prices stuck in tight range of 2920-3060, but also we have witnessed recovery rally in past some trading sessions. But surge in COVID-19 infections again dimmed the outlook for economic growth and fuel demand. In Europe, some countries were reviving curfews and lockdowns to fight a surge in new coronavirus cases, with Britain imposing tougher COVID-19 restrictions in London. Some recovery rally has been seen which is boosted by the possibility of an economic stimulus package in the United States, but struggled to recover fully from the previous session’s losses when higher U.S. gasoline inventories signaled a deteriorating demand outlook as coronavirus cases soar. Overall product supplied - a proxy for demand - averaged 18.3 million barrels per day (bpd) in the four weeks to Oct. 16, the EIAsaid, down 13% from the same period a year earlier. Record new daily COVID-19 infection numbers in several U.S. states and in Europe, along with further coronavirus lockdowns and China’s crackdown on outbound travel, all bode ill for fuel demand. Russian President Putin indicated he would be prepared to extend record supply cuts due to COVID-19 pandemic. This week crude price may witness huge volatility within the range of 2880-3200, where selling pressure can be seen near the resistance. U.S. natural gas futures traded within a few cents of a 20-month high on a slightly smaller than expected weekly storage build and as liquefied natural gas (LNG) exports keep rising. Gas prices have also soared in recent days as output slowed and on forecasts for colder weather and higher heating demand over the next two weeks. This week Natural gas may trade in wider range of 190-240 with bullish bias.
The bull-run in cotton futures (Nov) may see some pause and trade sideways to down in the range of 19500-20500. Cotton prices slashed lower in Karnataka due to weakened mill demand. In Maharashtra cotton prices are dwindling amid weak buying by millers. According to the traders, weather conditions are largely positive, barring a few regions that are still overcast. Gujarat cotton prices are sliding down as private millers were uninterested in buying cotton at recent elevated levels. In the international market, On Monday, USDA will update its crop harvest and condition data. The weather outlook does call for above average rainfall for the 6-10 days forecast. Such weather is apt to do more harm to cotton grades than cotton yields. Cotton prices had fallen below 50 cents in early April after the coronavirus pandemic upended demand, but since then have risen over 40% on concerns about adverse weather. Chana futures (Nov) may witness sell on rise and facing resistance near 5400-5450, it may witness correction towards 5200-5150 levels. Bearish sentiment prevailed in chana on weak physical demand with chana (kanta) declining to Rs.5,325-50 a quintal. In a bid to cool down the recent hike in pulses prices, the Union government plans to release 40,000 tonnes of tur dal from its buffer stock into the retail market in small lots. The bullish tone will probably continue to prevail in guar seed & guar gum futures and may test 4400 and 6800 respectively, taking positive cues from the spot markets of Rajasthan. New guar seed shot up and breached Rs. 4000 per quintal mark, in many mandis.
Base metals may trade in the range with positive bias on hopes of strong demand in top metals consumer China and risks of supply disruptions. Copper can test 560 by taking support near 520 as the prospect of buying by China of copper for its stockpiles. The meeting of the country’s leaders to discuss its next five-year economic and social development plan will take place this week and is expected to approve the stockpiling of commodities such as copper. China has 16% ownership of world copper mining output, but it consumes about 50% of refined production. Meanwhile, Chilean miner Antofagasta said that output had dropped 4.6% in the third quarter compared with the previous three months and was likely to be at the lower end this year. Antofagasta produced 169,600 tonnes of copper during the third quarter, down from 177,700 tonnes in the second quarter. However, worries about rising COVID-19 cases around the world and uncertainty surrounding another U.S. coronavirus relief package before the Nov. 3 election will dampen metals demand. Zinc may trade in the range of 190-210 while Lead can move in the range of 146-155. The prices of zinc getting support as mines are forced to shut due to the pandemic, especially in Peru. Nickel may trade in range of 1100-1200 levels. Delays in planned expansions of production capacity in Indonesia until next year may support the prices but expectations of a surplus of 117,000 tonne this year may weigh on prices. Aluminum may move in the range of 148-157 levels. Inventories of aluminum in LME warehouses in Port Klang at 814,225 tonnes are down about 20% since climbing above one million tonnes in July.
LEAD MCX (NOV) contract closed at Rs. 146.85 on 22nd Oct’2020. The contract made its high of Rs. 150.45 on 14th Oct’2020 and a low of Rs. 142.65 on 05th Oct’2020. The 18- day Exponential Moving Average of the commodity is currently at Rs. 147.04. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.870.
One can buy near Rs. 147 for a target of Rs. 156 with the stop loss of Rs. 142.
NICKEL MCX (NOV) contract closed at Rs. 1168.60 on 22nd Oct’2020. The contract made its high of Rs. 1187.00 on 21th Aug’2020 and a low of Rs. 1043.40 on 01st Oct’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1133.78. On the daily chart, the commodity has Relative Strength Index (14-day) value of 65.238.
One can buy near Rs. 1160 for a target of Rs. 1220 with the stop loss of Rs. 1130.
DHANIYA NCDEX (NOV) contract was closed at Rs. 6742.00 on 22nd Oct’2020. The contract made its high of Rs. 6900.00 on 29th Sep’2020 and a low of Rs. 6536.00 on 22th Sep’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 6737.82. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.460.
One can buy above Rs. 6700 for a target of Rs. 7100 with the stop loss of Rs 6550.
Commodities traded in a range of a tight spread and CRB closed near 151 levels. Investors kept their focus on the U.S. Congress’ progress towards passing the latest stimulus measures before the Nov. 3 presidential election.The dollar weakened last week to a one-month low, as increased optimism surrounding a new U.S. stimulus package helped boost the demand for riskier currencies, to the detriment of the greenback. News that President Donald Trump was willing to accept a large aid bill, as a string of negative opinion polls puts pressure on him to get a deal done before the Nov. 3 election, has raised hopes for a stimulus breakthrough. Market concerned about weak fuel demand as the number of COVID-19 cases in Europe and some U.S. states continues to climb. Fears were also exacerbated by China’s decision to restrict outbound travel to curb the spread of the virus. In energy counter, crude traded weak after a build in U.S. gasoline inventories pointed to a deteriorating outlook for fuel demand as coronavirus cases soar in North America and Europe though natural gas outshined with its massive upside. Libya has seen production recover to about 500,000 barrels per day and the government in Tripoli expects that to double by year-end. Bullion counter didn’t see big move but maintained its upside on benefits of doubts.November natural gas futures closed to $3.023/MMBtu, the highest front-month contract settlement since January 2019, as forecasts continue to predict colder weather while liquefied natural gas feedgas flows tick higher. Gas production month-to-date is averaging 86.2 Bcf/day, according to Refinitiv data, the lowest since September 2018. Gold rallied dollar tumbled and bulls in the yellow metal chased the prospects of a Covid-19 economic stimulus before the U.S. election in two weeks. Silver followed the trend of gold and closed above 63000. Stimulus hope gave upside to the industrial metals and zinc and nickel outshone other metals.
In spices, turmeric and jeera prices flared up on improved local and exports demand, and higher-to-steady arrivals at major mandis. Cotton counter amazed market players with its amazing upside moves in last eight week. Firm US market, procurement by CCI, procurement by China propped up its prices in both spot and futures market. Chana continued tomove down from past two weeks. In a bid to cool down the recent hike in pulses prices, the Union government plans to release 40,000 tonnes of tur dal from its buffer stock into the retail market in small lots.Due to demand in soy oil and soy meal crushing pace of soybean was strong but the upside was capped. Reports of 20-30 per cent damage to soybean crops in Madhya Pradesh and Maharashtra on account of recent rains have also contributed to the uptrend in soya oil and soybean.
The BDI tracks the prices of bulk carriers which are the life-blood of global trade, carrying everything from iron ore, coal to grain. It represents the cost paid by an end customer to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The index is quoted every working day at 1300 London time. The Baltic Exchange is similar to the NYMEX in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. The Baltic is owned and operated by the member buyers and sellers.The exchange maintains prices on several routes for different cargoes and then publishes its own index,the BDI, as a summary of the entire dry bulk shipping market. This index can be used as an overall economic indicator as it shows where end prices are heading foritems that use the raw materials that are shipped in dry form. The Baltic Dry Index takes into account 23 different shipping routes carrying coal,iron ore, grains and many other commodities.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, is trading near 1,346 points; it’s lowest since Sept. 21. Index increased on peak of 2097 on October 06, 2020, the highest since late September 2019. Baltic Dry increased 23.49%% since the beginning of 2020 despite of worldwide lockdown. Most of the strength is due to increased Chinese steel mill demand for iron ore coupled with the increased production and exports out of Brazil. China is aggressively restocking their depleted inventories as well as the ongoing recovery and stimulus activity in Asia.
Volatility in forex vertical has somehow modest amid just a week and a half until the US election gets over. Although latest poll do suggest that Joe Biden's win looks certain but markets still in fear of surprises as it was happened in 2016 when Trump’s won the election. Indian Rupee somehow managed to close below its one month low of 73.80 backed by strong inflows of $2 billion by foreign investors in October so far. However uncertainty over the US government whether the fiscal stimulus deal ahead of US election will get strike or not. We think rupee is likely to remain slightly on the negative side in coming days. On the major’s space, despite sudden surge in covid cases across euro zone, euro remains strong after the global market sentiment turned positive for a possible US fiscal stimulus deal. Meanwhile latest Germany’s business activity index rose to 54.5, above the expected 53.2 further created optimism in euro ahead of ECB monetary policy later this week. We will remain slightly bullish in euro before US election starts. While pound is remains higher after hopes of a new UK/EU trade agreement still alive. Going forward next week, possible announcement of US fiscal stimulus deal, Brexit headlines and ECB monetary policy will be key event to watch out for further move in euro and pound as well.
USD/INR (OCT) contract closed at 73.6850 on 22-Oct-20. The contract made its high of 73.8200 on 22-Oct-20 and a low of 73.3400 on 20-Oct-20 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 73.61.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 49.90. One can sell at 73.70 for the target of 72.90 with the stop loss of 74.20.
GBP/INR (OCT) contract closed at 96.4875 on 22-Oct-20. The contract made its high of 96.8725 on 22-Oct-20 and a low of 94.8375 on 20-Oct-20 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 95.44.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 58.77. One can sell at 96.50 for a target of 95.50 with the stop loss of 97.10.
| 19th OCT | EU set to gain WTO clearance for U.S. tariffs next week |
| 19th OCT | Weakened U.S. consumer watchdog expected to bite back if Biden wins election |
| 19th OCT | India must not neglect bank recap despite pandemic, says former RBI deputy governor |
| 21th OCT | UK borrowing exceeds forecasts, debt highest since 1960 |
| 21th OCT | China's fiscal revenues rise 4.7% in third - quarter as economy gains steam |
| 21th OCT | IMF endorses Japan PM Suga's reform agenda, urges BOJ to review inflation goal |
| 21th OCT | China to balance stable growth and risk prevention - PBOC |
| 22th OCT | German consumer morale darkens as corona virus cases soar |
| 22th OCT | U.S. weekly jobless claims fall; many unemployed losing benefits |
EUR/INR (OCT) contract closed at 87.09 on 22-Oct-20. The contract made its high of 87.495 on 21-Oct-20 and a low of 85.9125 on 19-Oct-20 (Weekly Basis). The 21- day Exponential Moving Average of the EUR/INR is currently at 86.69.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 54.69. One can buy at 87.00 for a target of 88.00 with the stop loss of 86.40.
JPY/INR (OCT) contract closed at 70.345 on 22-Oct-20. The contract made its high of 70.4725 on 22-Oct-20 and a low of 69.50 on 20-Oct-20 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 69.83.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 34.71. One can buy at 70.30 for a target of 71.30 with the stop loss of 69.70.
The Rs 518 crore public offer of Equitas Small Finance Bank has subscribed 1.94 times on October 22, the final day of bidding. The offer has received bids for 22.57 crore equity shares against offer size of 11.58 crore equity shares, the subscription data available on the exchanges showed. The offer size excluded anchor book, through which company had raised Rs 140 crore on October 19. This is the third public issue in small finance bank segment after AU Small Finance Bank and Ujjivan Small Finance Bank. The portion set aside for qualified institutional investors has been subscribed 3.9 times, and that of non-institutional investors 22 percent and retail investors 2.08 times. The bank also reserved a portion for its employees and promoter Equitas Holdings' shareholders which subscribed 1.84 times and 41 percent. The public issue consists of a fresh issue of Rs 280 crore and an offer for sale of 7.2 crore equity shares by Equitas Holdings to comply with shareholding norms set by the Reserve Bank of India. The issue price has been fixed at Rs 32-33 per share. As per the mandate, Equitas Holdings has to reduce its shareholding in Equitas Small Finance Bank up to 40 percent till September 2021. Hence, Equitas Holdings could be looking for merger & acquisition and bulk stake sale, and it is also in the process of seeking principle approval from RBI for its merger with the bank.
Gland Pharma, which is majority owned by China’s Shanghai Fosun Pharmaceutical (Fosun Pharma), has received a crucial nod from market regulator Sebi to launch an initial public offering (IPO) to raise up to Rs 6,000 crore. If the listing plans of the Hyderabad-based injectable drug maker fructify, it would mark the first major IPO by an Indian company that has a Chinese parent. The nod from the Securities and Exchange Board of India (Sebi) comes amid a buoyant phase of valuations in the pharma sector and frosty diplomatic ties between India and China due to military aggression in Eastern Ladakh earlier this year, leading to casualties on both sides. Citi, Kotak Mahindra Capital, Nomura, and Haitong Securities are the merchant bankers working on the issue. Law firm Cyril Amarchand Mangaldas is advising Gland Pharma, Khaitan and Co is advising the promoters, and S&R Associates is advising the merchant bankers.
Premium biscuit-maker and supplier to fast-food chains like McDonald's and Burger King, Mrs Bectors Food Specialities, has filed a draft red herring prospectus (DRHP) with Securities and Exchange Board of India (SEBI) to raise nearly Rs 5,50 crore via an Initial Public Offering (IPO). The company manufactures and markets a range of biscuits under its flagship brand ‘Mrs. Bectors Cremica’ and its bakery products under the brand ‘English Oven’. Mrs Bectors is backed by private equity funds CX Partners and Gateway Partners. Both PE firms plan to make a partial exit through the proposed IPO. The promoters hold 52.45 per cent stake, while the private equity investors CX Partners and Gateway own 46.75 per cent stake. The IPO comprises a fresh issuance of shares worth Rs 50 crore and the offer of sale component by existing shareholders is for Rs 500 crore. The proceeds of the IPO will be used for growth capital linked to the firm’s manufacturing unit at Rajpura, Punjab and for general corporate purposes, the company said in its filing with the regulator.
Kalyan Jewellers India Ltd has received capital markets regulator SEBI’s go ahead to raise an estimated Rs 1,750 crore through an initial share-sale. The IPO comprises issuance of fresh equity aggregating up to Rs 1,000 crore and an offer for sale (OFS) worth Rs 750 crore, according to the Draft Red Herring Prospectus (DRHP). Kalyan Jewellers’ promoter T S Kalyanaraman would be offloading shares worth up to Rs 250 crore, while Highdell Investment Ltd would sell up to Rs 500 crore worth of shares through the OFS route. Kalyan Jewellers, which filed draft papers for IPO in August, obtained SEBI’s observations on October 15. SEBI’s observations are necessary for any company to launch public issues like initial public offer (IPO), follow-on public offer (FPO) and rights issue. The proceeds from the fresh issue of shares would be utilised for working capital requirements and general corporate purpose. At the end of June this year, the company had 107 showrooms across 21 states and Union Territories in India, and 30 showrooms in the Middle East. Kalyan Jewellers designs, manufactures and sells a wide range of gold, studded and other jewellery products. Kalyan Jewellers designs, manufactures and sells a wide range of gold, studded and other jewellery products. Axis Capital, Citigroup Global Markets India, ICICI Securities and SBI Capital Markets are the global co-ordinators and book running lead managers to the offer.
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Franklin Templeton Mutual Fund has said its six shut schemes have received Rs 8,302 crore from maturities, pre-payments and coupon payments since closing down in April. Franklin Templeton MF shut six debt mutual fund schemes on April 23, citing redemption pressures and lack of liquidity in the bond market. "The six schemes have received total cash flows of Rs 8,302 crore as of October 15, 2020 from maturities, pre-payments and coupon payments since April 24, 2020," Franklin Templeton MF said in a statement. Part of this amount has been utilised to repay borrowings and post repayment, Rs 5,116 crore is available for distribution to unitholders in four cash positive schemes -- Franklin India Ultra Short Bond Fund, Franklin India Dynamic Accrual Fund, Franklin India Low Duration Fund, Franklin India Credit Risk Fund, subject to fund running expenses. Of the six schemes, Franklin India Ultra Short Bond Fund, Franklin India Dynamic Accrual Fund, Franklin India Low Duration Fund and Franklin India Credit Risk Fund have 40 per cent, 19 per cent, 19 per cent and 4 per cent of their respective assets under management (AUM) available in cash to distribute to unitholders, it said. This is subject to a successful unitholder vote, the fund house added. The fund house reiterated that the cash flows received so far are without the ability to efficiently monetise assets, which will only be possible after successfully completing the e-voting process.
Debt-oriented mutual fund schemes witnessed a net outflow of over Rs 51,900 crore in September, making it the second consecutive monthly withdrawal, largely on the back of a massive pullout from liquid category. According to the Association of Mutual Funds in India (Amfi), mutual funds (MFs) that invest in fixed-income securities or debt funds saw an outflow of Rs 51,962 crore last month as compared to Rs 3,907 crore in August. Prior to that, debt funds had seen an inflow of Rs 91,392 crore in July, Rs 2,862 crore in June, Rs 63,665 crore in May and Rs 43,431 crore in April. Liquid funds witnessed net outflows to the tune of Rs 65,952 crore, which is where corporate companies tend to park money, followed by ultra short duration funds (Rs 4,867 crore) and money market funds ( Rs 4,857 crore). Credit risk funds saw an outflow of Rs 539 crore in September compared to Rs 554 crore in August, Rs 670 crore in July, Rs 1,494 crore in June, Rs 5,173 crore in May and Rs 19,239 crore in April. Gilt funds, which attracted investor interest in the recent times given their sovereign status and zero exposure to credit risk, experienced net outflow of Rs 483 crore in September, which was lower than the net outflow of Rs 1,122 core in August.
Monthly contributions via systematic investment plans (SIP) in September has remained more or less stable compared to the last two months. Inflows for the same in September was Rs 7,788 crore, down marginally from Rs 7,792 crore in August and Rs 7,831 crore in July. Assets under management (AUM) of mutual fund companies that have come through the SIP route fell marginally to Rs 3.35 lakh crore in September from Rs 3.36 lakh crore in August. The silver lining is that the mutual fund industry added new SIP accounts in September. Currently, mutual funds have about 3.33 crore SIP folios through which investors regularly invest in schemes. In August, the total SIP folios were 3.3 crore. Overall, net AUM of the 42-player mutual fund industry fell to Rs 26.85 lakh crore in September from Rs 27.49 lakh crore a month ago.
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