In the week gone by, global markets looked optimistic as Omicron cases appear less I severe and less likely to result in hospitalization even as COVID-19 case counts soar amid other positive economic data. Participants were enthused by encouraging US data and inflation worries went into the background. The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week. Another data showed that US home sales increased for a third straight month in November but supply remained tight, keeping house prices elevated and squeezing first-time buyers out. US economic growth slowed in the third quarter at a 2.3% annualized rate. Japan’s November consumer inflation marked the biggest year-on- year rise in nearly two years on surging fuel costs. Japan’s core consumer price index (CPI) rose 0.5 percent in November from a year earlier.
Back at home, domestic markets moved firm backed by buying across most sectors. A recent fall in crude oil prices and ease in dollar is expected to lift sentiment. Undoubtedly, in the first part of the week FII outflows and rising Omicron cases have investors kept on their toes. A recovery in the rupee and diminishing foreign outflows is supporting the sentiments. Meanwhile, India's crude oil imports in November rose to their highest level in 10 months as refiners stocked up to boost runs in anticipation of strong demand in the world's third-largest oil consumer and importer. The recent minutes of the Monetary Policy Committee (MPC) meeting said that the emergence of the Omicron variant may cast a shadow on the momentum of contact-intensive services that were just showing signs of recovery in recent months. In another development, the ministry of corporate affairs proposed amendments to the Insolvency and Bankruptcy Code (IBC) to expedite the rescue of distressed companies ending up in bankruptcy tribunals. The Reserve Bank of India (RBI) has deferred the implementation of mandatory tokenisation of card transactions after the industry sought more time to comply with the latest data safety rules. We expect volatility to continue on account of potential risk from Omicron variant. Investors are looking for incoming economic readings globally for direction. Besides, going forward, movement of Currency, inflow and out flow of foreign fund, crude oil prices amid other global factors will continue to dictate the trend of the market.
On the commodity market front, CRB broke the long consolidation and saw sharp jump in the week gone by. Fall in dollar index augmented the commodities prices, despite the rise in Omicron. The safe-haven dollar languished near an almost one-week low against its major peers as investors adopted a more optimistic stance about the global economic outlook, despite the rapid spread of the Omicron coronavirus variant. We can see thin trading in commodity this week owing to New Year celebrations. On data front, only NBS Manufacturing PMI is scheduled of high importance from China. Bullion is trying to make a base and may trade with upside bias. Gold and silver can trade in a range of 47400-48900 and 61000-64000 respectively. In energy counter, crude can see more upside and likely range for trading is 5300-5700 whereas natural gas may take support near 260; any upside is capped near 300 levels. Industrial metals may perform mix as market is full of ambiguity.
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over Q2 September 2020.
Looking at the substantial growth opportunities in the Indian power transmission sector, PGCIL is geared up to garner a substantial portion of the business potential in the sector, the company should maintain a robust financial performance, despite the planned debt-funded capex, backed by strong operating efficiency and the regulated tariff regime. The company should also continue to benefit from its strategic importance to India’s power sector, given its role in developing and operating the national power transmission network. Thus, it is expected that the stock will see a price target of Rs.245 in 8 to 10 months’ time frame on a target P/BV of 2x and FY23 BVPS of Rs.122.44.
With consumer-focused ranges being one of the focus pillars, the company has a competitive advantage in engineering, facilities, and expertise. All the new products of the company has shown positive volume growth from between 6% to 15% in volume growth. Thus, it is expected that the stock will see a price target of Rs.683 in 8 to 10 months’ time frame on a target P/E of 21x and FY23 (E) earnings of Rs.32.53.
The stock closed at Rs 3993.50 on 24th December, 2021. It made a 52-week low at Rs 2217.40 on 29th January, 2021 and a 52-week high of Rs. 4212.75 on 07th September, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 3441.61.
As we can see on chart that stock is trading in uptrend since June, 2020 and trading in higher highs and higher lows. Apart from this, stock is forming an “Inverse Head and Shoulder” pattern on weekly charts which is considered to be bullish. Last week, the stock ended marginally lower with positive bias along with high volumes, so further upside is anticipated from the stock in coming days. Therefore, one can buy in the range of 3950-3980 levels for the upside target of 4300-4400 levels with SL below 3760 levels.
The stock closed at Rs 1723.80 on 24th December, 2021. It made a 52-week low of Rs 915.00 on 26th February, 2021 and a 52-week high of Rs. 1735.20 on 24th December, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1293.74.
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, the stock has formed a “Rising Wedge” pattern on weekly chart and has given the pattern breakout along with high volumes, closed at day’s high which indicates buying is aggressive for the stock. Therefore, one can buy in the range of 1690-1710 levels for the upside target of 1850-1880 levels with SL below 1595 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 could not manage to close in positive territory and ended the week in red, amid concerns over rising Omicron variant cases. But Nifty managed to close above 17000 mark after a quite volatile week. Derivative data suggests lack of clear direction as call writers were seen adding open interest at 17200 strike while put writers held maximum open interest at 17000 strike. Implied volatility (IV) of calls closed at 14.52 % while that for put options, it closed at 15.11. The Nifty VIX for the week closed at 15.83%. PCR OI for the week closed at 1.00. Technically Nifty is facing strong hurdle at its 100 days exponential moving average on daily charts which is placed around 17150 levels while 200 days exponential moving average would act as a strong resistance for banking index which is placed around 35400 levels. For upcoming week we expect markets to trade in sideways direction in the absence of any trigger from global markets on the back of Christmas and New Year. However, domestic players are expected to keep strong vigil on any updates regarding Omicron cases.
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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 (Apr) witnessed some profit booking last week after closing higher for 4th consecutive week. It is likely to trade in a range 8870-9350. Currently, prices are up about 55% y/y on expectation of lower production due to excess rains. However, lower than expected export volume is keeping prices under control. In the first 7-months (Apr-Oct) of FY 2021/22, exports down 23% to 89,850 tons Vs last year but higher by 6.5% if compared with 5-year average. In view of heavy rains in the growing areas, particularly Maharashtra, crop’s yield could be lower and delayed by two to three weeks. The production could be lower in Karnataka by about 20-25% due to this disease. Jeera futures (Jan) seen some selling from 5-week high prices and likely to trade with positive bias in the range 15900-16700. Jeera sowing progress is still slow. As per respective Agriculture Dept data, area under jeera in Gujarat as on 20-Dec was only 2.87 lakh ha Vs 4.61 lakh hac last year while in Rajasthan jeera is sown in 5.18 lakh hac. As per Govt. data, exports of jeera for Apr-Oct down by 17% Y/Y at 1.50 lakh tonnes compared to 1.82 lt last year. Demand is currently sluggish as export demand not increasing as per expectations. However, export demand expected to rise in near future. Arrivals in Unjha market are as 11000/13000 bags, while Rajkot mandi had arrivals of 1000 bags of 20 kg each. Dhaniya futures (Jan) closed lower last week due to lower physical demand and likely to trade lower towards 8150 with resistance at 8690. Sowing is in progress in MP, Rajasthan and Gujarat. There are reports of slow progress in area in MP and Rajasthan as farmers have shifted to Oilseeds and pulses crop. The processors and stockists were reluctant to increase their stock position at current rates. Meanwhile, area under coriander in Gujarat as on 20-Dec is pegged at 1,23,250 hac, which is 142% higher as compared to normal area but less than last year 1,34,413 hac. As per govt. data, exports have been down 12.7% during Apr-Oct period to 28,800 tonnes Vs 33,000 tonnes last year but 8.6% higher compared to 5-year average.
Bullion counter traded positive throughout the week whereas gold prices rose above $1800 ahead of the year-end holidays, even as the dollar steadied and appetite for riskier assets improved on easing fears over a fallout from the Omicron coronavirus variant. Thin trading and Christmas buying are keeping gold above the $1,800 level. Global shares, bond yields and riskier currencies all hit recent highs as investor confidence grew on signs that the Omicron variant of COVID-19 might be less severe than feared, as well as robust U.S. economic data. The main driver for gold moving again above the $1,800/ounce mark are rising U.S. inflation expectations as gauged by the breakeven. The dollar index, on course for a weekly dip, recovered slightly but stayed near a one-week low against riskier rivals, making gold less appealing for holders of non-U.S. currencies. Gold faces technical resistance at $1,815 and $1,826, with geopolitical risks ahead potentially keeping gold supported, despite the tapering narrative. Going forward, the Federal Reserve’s more aggressive tapering and the potential of three rate hikes in 2022 have already been largely priced in. This means that any new fear could change the outlook and benefit gold. Even though the initial reaction to the Fed tapering and higher interest rates might be negative for gold, once processed, it could trigger another rally. Gold has a history of performing well once the Fed commences a rate hike cycle and silver follows gold. We might see gold bottoming out around May-June next year and start rallying. Ahead in the week, gold prices may continue to trade within the range of 47000- 49000 levels. Silver may trade in the range of 60000-64500 levels and buying on dips would be strategy.
Oil prices bounced in a light volume on signs that the worst effects of the Omicron variant might be more containable than previously feared, even as countries imposed travel restrictions on surging infection levels. The oil market has wavered in recent days over how seriously to take the threat of another slump in fuel demand. The Omicron variant is more transmissible than previous coronavirus variants, but early data suggests it causes a milder level of illness. Some governments are imposing tighter travel restrictions to slow the spread of the variant, which could hit demand even if Omicron causes a lower level of hospitalization, particularly among the vaccinated. The United States authorized separate antiviral COVID-19 pills manufactured by both Pfizer and Merck, and officials from the U.S. Food and Drug Administration said the medications are both effective against the Omicron variant. Operating U.S. oil and gas rigs rose to their highest levels since April 2020 in the most recent week, according to energy services firm Baker Hughes. Ahead in the week prices may continue to trade with higher volatility, but trends could be mixed and both side movements can be witnessed in the range of 5000-5750. Natural gas prices slipped below the psychological level of 300 on MCX amid low light demand. According to NatGasWeather for December 23- 29, “National demand will remain light the next 7-days as high pressure rules over most of the central, southern, and eastern U.S. with highs of the 40s to 70s. Ahead in the week prices may continue to trade with a bearish bias and where it may take support near 240 and face resistance near 320.
Base metals may trade in the range due to thin volume ahead of New Year. The price may take direction on any fresh clues on how the rapidly spreading Omicron coronavirus variant would affect global demand. Soaring energy prices in Europe raised concerns of higher production costs of zinc and aluminum and smelter shutdowns. Copper may move towards 725 levels with resistance of 755 levels. Expectations of slower demand growth in China and rising supplies from operations such as Anglo American's Quellaveco mine in Peru are likely to keep prices subdued. However, MMG Ltd's Las Bambas copper mine said that a temporary truce to lift a month-long blockade affecting a key copper transport road in Peru does not guarantee conditions to restart operations in a sustainable way. Japan's Pan Pacific Copper (PPC) expects copper's average price to drop to $8,600 a tonne in 2022 from $9,300 this year as additional supply flows from new mines. Mine supply is expected to rise 3.9% to nearly 22 million tonnes next year, according to the International Copper Study Group, which expects a surplus of 328,000 tonnes in the refined market. Nickel may trade in the range of 1520-1575 levels. Zinc can move in the range of 275-295 levels. High power prices have forced some zinc smelters to suspend operations and some analysts believe the situation will continue to be difficult during the winter. Lead can move in the range of 182-190 levels. Aluminum may move to 236 with support of 220 levels. The power shortage in Western Europe is expected to affect less than 6% of global aluminium capacity and reduce production by 500,000 mt, which is still lower than new capacity outside China in 2022.
Cotton futures (Jan) closed higher for the third consecutive week as ICE cotton futures edge higher as Omicron concerns fade. It is likely to trade higher towards 33,250, if sustains above 32,500 with support at 31,720. Current cotton prices are high y/y 59.5% due to concerns over production, slow arrivals and better demand for exports. There is increased buying by spinning mills, while daily arrivals remained steady. As per CAI data, arrivals are down by about 15% at 77.76 lakh bales until November Vs 91.57 lakh bales for the same period last year. According to experts, the total arrival of kapas in the mandis of the state so far this season starting October 1, has been lesser than last year, which has resulted in a lower outstanding/leftover stock of cotton with the mills. In the current season, overall availability will be lower than last year, while consumption expected to rise because of higher demand from mills and exports. USDA also scale down the world cotton production for 2021/22 by 0.18% to 121.56 million bales in its latest monthly release but no change in India cotton production. Guar seed futures (Jan) closed higher for third consecutive week due to improving physical demand as supplies are lower compared to last year. It is expected to trade towards higher 6700 levels with support at 5950. The prices have slipped to 2-month low this month, which slows down the physical arrivals in markets. Currently, prices are up 50% y/y due to expectation of lower production, multi-year lower stocks and good export demand. In Oct, Guar gum exports are higher by 60% y/y at 27,150 tonnes while exports in 2021/22 (Apr-Oct) are up by 46% y/y at 1.85 lakh tonnes but still not reached the pre-covid levels. Castor Seed (Jan) closed lower for the fourth consecutive week and likely to trade sideways between 5500-6120. The exports of castor oil are lower during the last three months due to higher prices. Exports during Sep-Nov down by 16% at 1.39 lakh tonnes compared to 1.65 lt last year. Similarly, castor meal exports fall by 32% during (Aug-Nov) y/y. The prices are higher by 34% y/y, as production of castor expected to be lowest in last three years due to lower acreage at 15.98 lakh tonnes, according to advance estimates from Farm ministry. However, Gujarat agriculture department’s first advance estimate for kharif has pegged castor seed production at 14.08 lakh tonnes compared to average of 13.46 lt. This improvement in crop is expected due to revival of monsoon in September.
ALUMINIUM MCX (DEC) contract closed at Rs. 225.90 on 23rd Dec 2021. The contract made its high of Rs. 228.85 on 23rd Dec’2021 and a low of Rs. 210.60 on 26th Nov’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs 220.30. On the daily chart, the commodity has Relative Strength Index (14-day) value of 61.589.
One can buy above Rs. 230 for a target of Rs. 245 with the stop loss of 222.
NARURAL GAS MCX (DEC) contract was closed at Rs. 275.70 on 23rd Dec’2021. The contract made its high of Rs. 466.00 on 27th Oct’2021 and a low of Rs. 267.80 on 23rd Dec’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 300.00. On the daily chart, the commodity has Relative Strength Index (14-day) value of 32.379.
One can sell near Rs. 280 for a target of Rs. 240 with the stop loss of Rs 300.
JEERA NCDEX (JAN) contract closed at Rs. 16245.00 on 23rd Dec’2021. The contract made its high of Rs. 16860.00 on 24th Nov’2021 and a low of Rs. 15650.00 on 11th Nov’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 16201.36. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.014.
One can sell near Rs. 16200 for a target of Rs. 15400 with the stop loss of Rs. 16600.
CRB broke the long consolidation and saw sharp jump in the week gone by. Fall in dollar index augmented the commodities prices, despite the rise in Omicron. The safe-haven dollar languished near an almost one-week low against its major peers on last Thursday as investors adopted a more optimistic stance about the global economic outlook, despite the rapid spread of the Omicron coronavirus variant. Bullion counter continued its previous pull back rally. Gold advanced as the dollar weakened, while silver got a boost from signs of an improving U.S. economy. Gold couldn’t retain the gain whereas silver closed marginally up. Silver held gains after the final U.S. gross domestic product reading was revised higher, bolstering the outlook for metals exposed to industrial production. In energy counter, crude oil prices reignited whereas natural gas prices slipped from higher side. Oil prices have climbed after a decrease in U.S. crude stockpiles and higher equities pushed by economic data. Last to last week, the Energy Information Administration reported crude inventories have declined 4.72 million barrels. Rising home sales and consumer confidence have also sent positive signals to counter any worries about Omicron. Yet, the outlook is mixed on the consumption side. Gasoline stockpiles in the U.S. climbed as implied demand plunged nearly half a million barrels a day last to last week. An energy crunch in Europe and disruptions to supply from Libya and Nigeria have added to bullish sentiment in natural gas in Europe. European and UK gas prices rocketed Tuesday to all-time highs on strong winter demand and simmering geopolitical tensions between key supplier Russia and consumer nations. Though, it traded weak in India. Base metals revived on better data and supply side crunch. London copper prices hit a near two-week high on Wednesday bolstered by concerns over tight supply and renewed risk appetite despite looming uncertainty from surging COVID-19 cases due to the Omicron variant. High power prices have forced some zinc smelters to suspend operations and some analysts believe the situation will continue to be difficult during the winter. Lead demand may get a boost in 2022 as battery makers opt for cheaper alternatives to lithium, Chinese research house Antaike said.
Soybean prices slipped from the low on import duty cut from 17.5% to 12.5% and ban on fresh futures trade in oil seeds and edible oil futures. In spice, turmeric and Dhaniya prices flared up whereas jeera witnessed profit booking from higher side. Turmeric prices are up about 60% y/y on expectation of lower production due to excess rains. Physical demand is normal of jeera and sowing progress is still slow. Cotton prices remained firm on concerns over production, slow arrivals and better demand for exports. There is increased buying by spinning mills, while daily arrivals remained steady.
Rising interest rates in the United States will have an obvious effect on the world's economy. On December 15, US Federal Reserve has signaled to intensify their battle against the hottest inflation in a generation by shifting to end their assetbuying program earlier and signaling they favor raising interest rates in 2022 at a faster pace than expected. The central bank will double the pace at which it’s scaling back purchases of Treasuries and mortgage-backed securities to $30 billion a month, putting it on track to conclude the program in March 2022, rather than mid-year as initially planned and project three quarter-point rate increases in the same year. The new projections also showed policy makers see another three increases as appropriate in 2023 and two more in 2024, bringing the funds rate to 2.1% by the end of that year.
Why rates are projected to rise
Interest rates- the cost of borrowing- have been at record lows since the start of the pandemic in 2020, when the economy plunged into a sharp recession. The Fed slashed its key short-term fed funds rate to near zero and ramped up its bondbuying program to revive the economy. Now the Fed’s stimulus is successful in bringing the economy back from the brink after the 2020 COVID-19 shutdown. So the Fed is now pivoting to a less simulative policy to cool the spiking inflation caused by pent-up demand and supply chain disruptions. In November, consumer prices rose 6.8 percent from a year ago, its fastest pace in nearly 40 years. At the same time, the nation’s jobless rate fell to 4.2 percent, moving the job market closer to the Fed’s goal of maximum employment. However, the Fed flagged concerns over the new omicron strain, saying that “risks to the economic outlook remain, including from new variants of the virus.” So Fed doesn’t anticipate raising rates before ending the taper process, but could hike before reaching full employment.
What should investors do when Fed starts raising rates?
Economic stimulus usually lifts gold higher as the metal is considered a hedge against inflation and currency debasement. The Federal Reserve’s recent move on tapering of stimulus measures and surging inflation supported the dollar, which further limited the appeal of the yellow metal. The dollar index against a basket of six major currencies is hovering near 96 after the Fed decision. So bullion market is expected to adjust to these monetary tightening measures in coming days. In the changing economic environment, investors are likely to shift towards digital currencies as a store of value and inflation hedge, which may further dampen the safe appeal of precious metals.
A signal by the U.S. Federal Reserve to tackle inflation before it derails the U.S. economy boosted the crude prices. The FOMC policy decision was the right amount of hawkishness that allowed risk appetite to remain healthy and supportive for economic growth, which is also positive for oil demand.
Citing factors such as global and US inflation worries, a rate-hike cycle being adopted by central banks could trim liquidity in financial markets and slow recovery in the world's biggest economy and the metal prices would face a downward pressure globally. The high prices of metals have been already killing the demand in India, China and parts of Asia, besides South-East Asia.
Rupee logged the best week in last two months following the risk-on sentiment enhances since the omicron volatility hit the markets in last few weeks. Additional emerging currencies lifted following gains in Asian equities after the S&P 500’s record close. The U.S.’s short trading week was capped with a spate of positive data, including higher consumer sentiment, faster consumer spending and a sevenmonth high in sales of new homes. Going forward with a thin volume in forex for next week, USDINR may find some interim support near 74.75 while 75.30 would be the crucial resistance. Sterling climbed versus the dollar above key technical retracement levels at $1.3411 this week despite UK's GDP reading missed the market expectations, however, market bulls persisted. Sterling sat at one-month highs. We do think GBPINR has scope to run higher further towards 101.40 in the coming days. While euro faced selling pressure this week to end the winning streak made last week. Next week in low volume trading scenario, we think EURINR likely to stay in the range of 84.60 - 85.40 as well.
USD/INR (JAN) contract closed at 75.5275 on 23-Dec-21. The contract made its high of 76.4900 on 20-Dec-21 and a low of 75.5025 on 23-Dec-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 75.5100
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 43.18.One can buy at 74.90 for the target of 75.90 with the stop loss of 74.40.
GBP/INR (JAN) contract closed at 101.3150 on 23-Dec-21. The contract made its high of 101.3425 on 23-Dec-21 and a low of 100.1475 on 21-Dec-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 100.5798.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 51.80. One can sell at 101.25 for a target of 100.25 with the stop loss of 101.75.
| 23th DEC | Studies suggest reduced severity from Omicron |
| 23th DEC | US financial conditions remain easy even as Fed pulls back on stimulus |
| 23th DEC | India suspends agricultural futures trading to alleviate inflation fears |
| 22th DEC | Fate of $1.75tnUS spending bill centers on growth vs inflation fight |
| 22th DEC | UK economy grew at slower pace than firstthoughtin third quarter |
| 21th DEC | Omicron accounts for nearly three-quarters of US Covid cases |
| 20th DEC | Truss faces choice of Brexit compromise or trade war, warn EU diplomats |
| 20th DEC | World Economic Forum defersDavos meeting overOmicron concerns |
| 20th DEC | China cuts lending rate as economic momentum falters |
EUR/INR (JAN) contract closed at 85.5925 on 23-Dec-21. The contract made its high of 86.1300 on 20-Dec-21 and a low of 85.5025 on 22-Dec-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 85.4781.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 44.45. One can buy at 84.75 for a target of 85.75 with the stop loss of 84.25.
JPY/INR (JAN) contract closed at 66.1475 on 23-Dec-21. The contract made its high of 67.3750 on 20-Dec-21 and a low of 66.1025 on 23-Dec-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 66.3468.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 40.48. One can sell at 66.00 for a target of 65.00 with the stop loss of 66.50
Data Patterns India made a stellar debut on the bourses as the stock opened with a massive 47.69 percent gains on December 24 following strong IPO subscription. Healthy financials with sound order book and huge growth potential amid Make in India opportunity boosted investors' sentiment. The stock started off trade at Rs 864, against issue price of Rs 585, on the BSE, while the opening price on the National Stock Exchange was Rs 856. This was the 62nd listing on the bourses in current calendar year. The public offer of the defence and aerospace electronics solutions provider had a strong demand from investors, oversubscribing by 120 times. The demand from non-institutional investors was higher than others as they bought shares 254 times their reserved portion. Qualified institutional investors portion was booked 191 times, while the part set aside for retail investors was subscribed 23.14 times. The public issue has fetched Data Patterns Rs 588.22 crore. The price band for the offer, which was opened for bidding last week, was Rs 555-585 per equity share. Data Patterns, among the few vertically integrated defense and aerospace electronics solutions providers, is catering to the indigenously developed defense products industry. The company has a robust order book which grew at 40 percent CAGR over FY18-1HFY22. Its orderbook stood at Rs 581.3 crore as of September 2021.
MedPlus Health Services, the second largest pharmacy retailer in India, put on an impressive performance as the stock surged 40.81 percent on debut on December 23, thanks to positive momentum in the secondary market and its strong initial public offering (IPO) subscription figures. The stock rallied as much as 43.6 percent to touch an intraday high of Rs 1,143.10 after opening at the day’s low of Rs 1,015, which was still 27.51 percent up from its offer price. It ended the day at Rs 1,120.85 on the BSE, up 40.81 percent over the issue price of Rs 796 a share. The company has grown its network of 48 stores in Hyderabad at the time it started business to over 2,326 stores in 261 cities as of September 2021 across Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, West Bengal, Maharashtra and Odisha. It operates more than 95 percent of its stores itself and the rest through a franchisee network. MedPlus mopped up Rs 1,398.30 crore through its public issue at a price of Rs 796 a share.
A ce investor Rakesh Jhunjhunwala-backed Metro Brands disappointed on its market debut on December 22, closing at 1.3 percent discount to the issue price despite the equity benchmarks clocking healthy gains for the second day. Metro Brands opened at Rs 436 on the BSE, a discount of 12.8 percent over its issue price of Rs 500. It sank to the day’s low of Rs 426.10 in the initial hour but recovered to hit a high of Rs 507.70. It, however, remained below the issue price for most of the session before closing at Rs 493.55, 1.2 percent lower than the issue price. One of the largest Indian footwear speciality retailers, Metro Brands has a panIndia presence through 598 stores (across Metro, Mochi and Walkway branded MBOs, Crocs branded EBOs, and Walkway franchisees and SIS) in 136 cities spread across 30 states and union territories in India.
CE Info Systems, known for its brand MapmyIndia, listed at a premium of 53 percent on December 21 despite volatility in the stock market. The stock opened at Rs 1,581 on the BSE against the issue price of Rs 1,033 per share. The initial public offering of the data and technology products and Platforms Company and leading digital maps provider was subscribed 154.71 times during December 9-13. Since its inception over 25 years ago, MapmyIndia has earned market leadership in the geospatial industry and built a strong moat by capitalising on early-mover advantage, developing proprietary and integrated technologies. Considering the industry tailwinds and strong market position with high entry barriers to business, we expect robust business growth going forward. Its healthy margin profile will keep profitability trajectory upbeat as well.
South-based real estate developer Shriram Properties made a weak debut on the bourses on December 20 as the stock listed with a discount of 20 percent compared to the issue price of Rs 118 per share. The stock opened at Rs 94 on the BSE. The maiden public issue of the realty company had seen a good response from investors as the offer was subscribed 4.6 times during December 8-10, 2021. Retail investors showed strong interest in the company as their reserved portion was subscribed 12.72 times, followed by non-institutional investors whose allotted quota was booked 4.82 times. Shriram Properties mopped up Rs 600 crore through its public issue that comprised a fresh issue of Rs 250 crore and an offer for sale of Rs 350 crore. The company will repay certain borrowings availed by itself and its subsidiaries. The price band for the offer was Rs 113-118 per equity share.
Softbank-backed Snapdeal has filed draft papers to raise Rs 1,250 crore through a public issue. There’s also an offer-for-sale of over three crore equity shares by existing shareholders, according to the draft red herring prospectus (DRHP). Softbank, along with seven stakeholders such as Foxconn, Sequoia Capital and Ontario Teacher’s Pension Plan Board, will participate in the OFS for partial exits. Collectively, this amounts to around 8 percent of the company’s pre-offer equity share capital. Snapdeal has 71 shareholders. While Softbank has 35.41 percent of the pie, founders Kunal Bahl and Rohit Bansal together own 20.28 percent in the company. None of the two founders is diluting any stake. Axis Capital Ltd, BofASecurities India Ltd, CLSAIndia Pvt Ltd and JM Financial Ltd are the book running lead managers to the issue. Snapdeal targets middle-income, price-conscious buyers who predominantly live in smaller Indian cities. It receives more than 86 percent of its orders from outside metro cities
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Buoyant stock markets and strong performance of equity schemes have led to equity funds mobilising Rs 46,752.37 crore through new fund offers (NFOs) in the current calendar year (2021, or CY21). The data from Value Research shows that NFO collection in CY21 was the highest in a decade, with 13 of the 70 equity schemes cornering 75 per cent of the amount raised. ICICI Prudential Flexicap Fund and ICICI Prudential Business Cycle Fund were the top funds which collected Rs 9,808 crore and Rs 4,185 crore, respectively, in NFOs. Asset management companies (AMCs) had collected the amount by launching schemes in various categories like thematic, multi-cap, banking, flexi-cap, and international funds. In the earlier calendar year, MFs had collected Rs 18,785.48 crore through NFOs. The data from Value Research shows that 2017 saw the second-highest collection of Rs 34,048.14 crore through NFOs in 10 years.
Sebi on Wednesday restored the validity period of "observation letter" issued by the markets regulator for launching new fund offerings (NFOs) by mutual funds to six months. This will come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said in a circular. The regulator, in March 2020, had extended the validity period of observation letter issued by it for the launch of NFOs from six months to one year from the date of Sebi letter. In Sebi parlance, issuance of observations letter implies its go-ahead for the NFO.
HSBC will acquire the mutual fund business of L&T Finance Holdings for $425 million (Rs 3,250 crore). The deal values L&T Mutual Fund at 4.2% of its assets under management of Rs 78,273 crore at the end of September. Earlier this year, Sundaram Finance paid Rs 338.53 crore, amounting to 4.5% of assets under management, to acquire Principal AMC. After completion of the deal, HSBC will merge the operations of L&T Mutual Fund with its existing asset management business in India. L&T Mutual Fund is ranked 12 out of 44 in the Indian mutual fund industry. Equity assets account for Rs 41,000 crore of the total cited above. HSBC is at 23 with assets of Rs 11,314 crore, of which equity accounts for Rs 4,264 crore. L&T Mutual Fund has 2.4 million active folios, is empaneled with leading banks and has a presence in 65 locations.
Aditya Birla Sun Life Business Cycle Fund has garnered over Rs 2,200 crore in the NFO period. The fund also received more than 1,17,800 applications during the NFO period. The NFO was open between November 15 and November 29. The fund is based on a new theme called- business cycles. This theme bases the stock selection based on the different phases of the macro-economic cycles like expansion, peak, contraction and slump.
Quantum Mutual Fund has announced a change in the face value of Quantum Gold Fund. The fund house says that the move is aimed at making the fund more accessible for investors. The face value of QGF has changed from Rs 100 to Rs 2. Accordingly, each unit will approximately represent 1/100th of 1 gram of gold.
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