Exactly 13 years after that fateful day on which the sub-prime implosion in India began with a lower circuit on 21 Jan 2008, the Sensex actually scaled 50,000. However, this was followed by a sharp correction as traders rushed to book profits; which is natural when a psychological level is breached. From the peak, the Sensex tumbled 785 points and finally closed at 49,625. ONGC, Bharti, SBI and IndusInd lagged in the index. All sectoral indices ended in the red with the PSU Bank index correcting 3%. Global markets continued to rack up gains on Thursday after Biden assured central bank support.
Serum Institute, which is manufacturing and marketing the AstraZeneca/Oxford vaccine in India, had a tragedy at its Pune complex after five people were killed when a huge fire broke out. Pictures showed thick black smoke billowing from the complex. Condoling the deaths, Adar Poonawala, assured the people of India and the Government that the unfortunate accident would not in any way hamper their commitment to manufacture and make available the vaccines as per schedule. The fire did not emanate from the COVID vaccine producing centre but from the BCG vaccine production centre. It may be recollected that Serum has licensed the shot developed by Oxford University and AstraZeneca and also plans to stockpile 50 million doses a month of Novavax vaccines. The government has ordered a probe.
After dragging along for nearly 4 months, the Reliance Retail deal with Future Group may finally see the light of day after SEBI gave a go-ahead to Future Group’s scheme of arrangement as well as the proposed sale of assets to Reliance Retail. The Rs.24,713-crore deal was signed in August last year. However, SEBI has also said that the pending litigation before the Delhi High Court and arbitration proceedings by Amazon should be specifically mentioned while seeking shareholders approval as well as the NCLT approval. It remains to be seen if Amazon still pursues the case considering FEMA restrictions.
The Indian rupee continued to gain on a day when the Sensex scaled 50,000 for the first time. The INR closed at a 5-month high of 72.99/$. On Thursday, the INR opened higher at 72.96 and registered an intraday high of 72.93 in the midst of a weakening US dollar. However, it closed the day at 72.99/$. In the meanwhile, the Bloomberg Dollar Index fell another 0.31% to 90.19. The sharp FPI flows in the last few months has allowed the rupee to strengthen from around 76 levels to better than 73. It remains to be seen at what levels the RBI would intervene to prevent the rupee strengthening beyond a point.
The government is confident that a consortium of global oil majors and investment funds would be keen to pay top dollars for the government stake in BPCL. It is well known that Anil Agarwal of Vedanta group has confirmed submitting an initial bid for BPCL. Others like Apollo Global and I-Squared Capital have also evinced interest. In addition, top oil producers from the Middle East as well as Russia’s Rosneft were keen on the assets of BPCL. The government proposes to sell its 53% stake in BPCL for $6.5 billion. This will be one of the test cases of strategic divestment and also crucial to divestment revenue targets.
It was a day of stellar results by Bajaj Auto. Consolidated net profits were up 29.7% at Rs.1716 crore in the Dec-20 quarter. At the same time, the revenues also grew by a healthy 16.62% to Rs.8910 crore in Q3. This is much better than the street estimates of top line and bottom line. For the quarter, the EBITDA was up 26.5% at Rs.1730 crore even as the EBITDA margins expanded by 150 basis points to 19.4%. In the Dec-20 quarter, Bajaj Auto sold 13.06 lakh units, which comprises 6.19 lakh units sold in the domestic markets and 6.87 lakh unites exported. Its share in the domestic market increased from 17.5% to 18.6%. Bajaj also confirmed it will be investing Rs.650 crore in its Chakan plan to manufacture high-end motorcycles. As of Dec-20 Bajaj Auto had surplus cash and cash equivalents of Rs.16,891 crore.