It was a rally to new highs for the US markets as the S&P 500 crossed the 4,000 mark for the first time on 01 April. IT stocks led the rally after chipmakers gave an upbeat earnings outlook. Seven out of the eleven sectors in the S&P 500 gained. The rally was triggered at a macro level by increased vaccinations and a massive fiscal stimulus. The US economy is likely to add 647,000 jobs in March after adding 379,000 in Feb-21. NASDAQ was up 1.5% as heavyweights like Amazon, Apple, Alphabet, Microsoft and Facebook rallied despite concerns over elevated valuations. Biden has promised a $2 trillion infrastructure push.
GST collections for Mar-21 scaled a record high of Rs.123,902 crore. This is the fourth month in succession that GST collections have stayed above the Rs.1.10 trillion mark. As a result, it is anticipated that net tax collections would have exceeded revised estimates for FY21 and hence the fiscal deficit for FY21 could be less than the budgeted 9.5%. Apart from a bounce in economic activity, tighter compliance and a sharp crackdown on GST evasion were also key reasons. The government confirmed that the GST revenues for March 2021 were the highest since the introduction of GST in July 2017. To curb GST evasion, government has used deep data analytics from multiple sources including GST, Income Taxes, Customs etc. An e-invoicing mechanism for firms with a turnover of over Rs.500 crore has also been implemented for GST.
There are 2 major IPOs coming up shortly. Jana Small Finance Bank has filed DRHP with SEBI for a fresh issue of Rs.700 crore plus 92.54 lakh shares via OFS. Jana has 611 branches, including 166 branches in unbanked rural centres serving over 80 lakh customers. Jana SFB is a scheduled commercial bank. The other IPO of Macrotech Developers (formerly Lodha Developers) will hit the market on 07 April. The IPO will comprise a fresh issue of Rs.2,500 crore in the price band of Rs.483-486 per share. Out of the proceeds, Rs.1500 crore will be used to reduce debt and Rs.375 crore to acquire land and land development rights.
Mishra Dhatu Nigam rallied 10% on 01 April after the company recorded highest ever provisional revenues of Rs.810 crore. This is sharply higher than its FY20 revenues. For the Mar-21 quarter, MIDHANI reported 67% growth in provisional sales at Rs 346 crore on yoy basis. It needs to be remembered that this higher sales is being achieved despite the disruption in mining production for 45 days during the first quarter of FY21. MIDHANI has placed special emphasis on cost reduction to tide over the troubled times. On Thursday, trading volumes doubled even as it is likely to benefit from its special defence sector supplies.
Provisional trade data released for Mar-21 indicates that merchandise exports were up 58% at $34 billion, a sharp growth over the previous months. However, exports for FY21 were lower by 7.4% compared to FY20. Merchandise imports were also up Rs.48.12 crore. What is actually gratifying is that the total trade value has crossed the $80 billion after a very long gap. However, imports for FY21 were 18.1% lower on a yoy basis. The trade deficit for Mar-21 stood at $14.12 billion. Non-petroleum exports were up 62.3% on a yoy basis at $30.79 billion, which could be an outcome of the Atma Nirbhar thrust in recent months.
Tata Steel market cap crossed Rs.100,000 crore and it regained its highest value since June 2008. Tata Steel has been one of the best stock market performers in India gaining 130% in the last 6 months, driven by a surge in demand and robust steel prices. The big boost came after Moody’s revised its outlook on Tata Steel from “Negative” to “Stable”. Tata Steel is expected to sustain the improvement over the next 12-18 month time frame. Like a lot of large companies, Tata Steel is also getting debt-averse and plans to reduce gross debt by $1 billion each year. Apart from an economic recovery, the proposed investments in infrastructure are also expected to drive steel demand in India. Tata Steel has also seen a rebound in OPMs in the last few quarters. Higher international prices could boost exports of steel in the near-term.