The market cap of 9 out of the top 10 Nifty companies ranked by market cap lost a total of Rs.248,542 crore in value during the previous week ended 29-Oct. Reliance and HDFC Bank were the big value losers. During the week, Reliance lost Rs.56,741 crore while HDFC Bank lost Rs.54,843 crore. Other big losers during the week were TCS Rs.37,453 crore, Infosys Rs.27,679 crore, Kotak bank Rs.27,545 crore, Bajaj Finance Rs.18,774.8 crore and HUL Rs.14,356 crore. ICICI Bank was only weekly gainer by Rs.30,010 crore.
According to EY India, the target of $5 trillion economy may be back-ended by 3 years and 2028 looks realistic, rather than 2025. This is on account of 2 lost years due to COVID-19. EY India used IMF’s macro projections for their analysis. EY assumed sustainable GDP growth at 6% in the medium term. If median GDP growth is 1% lower, target gets extended to 2030. It called for ramping up public sector investment to boost the investment rate. Investment rate in India has fallen from 39.8% to 29.3% over last 10 years.
Oct-21 was a month of FPI selling after 2 consecutive months of buying. FPIs pulled out Rs.12,278 crore from Indian markets in Oct-21. FPIs withdrew Rs.13,550 crore from equities but infused Rs.1,272 crore into debt. The FPI selling picked up momentum after bulge-bracket global brokerages like Morgan Stanley, UBS and Nomura downgraded Indian equities to equal-weight. One likely reason for the selling is that a spate of IPOs worth Rs.30,000 crore are expected in the next 2 weeks and FPIs are keeping funds ready.
Prudent Corporate Advisory, which recently bought the MF agency business of Karvy Stock Broking, plans to launch its IPO in second half of November. An early investors, TA Associates, will take partial exit in the IPO. The offer for sale (OFS) is for 85,49,340 equity shares. The main object of the IPO would be to list the stock and give an exit to the early investors. Prudent is a leading independent retail wealth management house with 7.73 lakh customers and 17,583 MF distributors. Prudent has 15.8% of the empanelled ARNs.
The IPO of Sapphire Foods India opens on 09-Nov. Sapphire Foods operates KFC and Pizza Hut outlets and is a franchisee for the Yum Brands. The IPO will close on 11-November. The entire IPO will be an offer for sale of 1,75,69,841 shares by existing holders. The IPO is expected to fetch around Rs.1,500-Rs.2,000 crore. Sapphire is an omnichannel operator and the largest franchisee of Yum Brands. Sapphire owns 204 KFC restaurants in India and Maldives, 231 Pizza Hut restaurants as well as 2 Taco Bell outlets in Sri Lanka.
Despite negative sentiments in the market, shares of breweries and distilleries were in demand as growth outlook improved. Stocks like Pioneer Distilleries and Tilaknagar Industries registered 52-week highs and others like IFB Agro, Khoday, GM Breweries, Som Distilleries and United Breweries were trading with gains even in these tepid markets. Post COVID, regulatory policies are turning more favourable for this sector. Meanwhile, Delhi plans to shift to retail outlets while Telangana state plans to issue more liquor licenses.
Indian Bank reported Rs.266 crore worth of fraud to the RBI across 3 key accounts. These were already NPAs but now these NPAs have been reported as fraud cases. These are MP Border Checkpost Ltd with outstanding dues of Rs.167 crore, Pune Sholapur Road Development of Rs.73 crore and SONAC which is worth Rs.27 crore. In all the three cases, the frauds have been classified as diversion of funds. However, Indian Bank has already made provisions of Rs.12.6 crore for SONAC and the other 2 are fully provided.
The upcoming Rs.18,300 crore IPO of One97 Communications (Paytm) will position the digital player among the 50 most valuable companies in India by market cap. At the upper end of the price band of Rs.2,150, Paytm will have a post-IPO valuation of Rs.139,379 crore. That will make Paytm the 36th most valuable company in India by market cap. Paytm market capitalization will be more than established giants like NTPC, IOCL, Vedanta, Grasim, Bajaj Auto, M&M, Hindalco and Coal India. IPO opens on 08-November.