For the week ended on 17th December, a total of 8 out of the top-10 most valuable companies by market cap on the Nifty saw wealth erosion to the tune of Rs.261,812 crore. While RIL was the big loser, gains were seen in Infy and Wipro. Reliance lost Rs.79,658 crore, HDFC Rs.34,690 crore, Bajaj Finance Rs. 33,152 crore, HDFC Bank Rs.27,298 crore, Hindustan Unilever Rs.24,083, SBI Rs.24,052 crore, ICICI Bank Rs.20,623 crore and TCS Rs.18,252 crore. Among gainers; Infosys gained Rs.26,516 crore and Wipro Rs.17,450 crore.
In good tidings for the government, CPSEs registered 45% growth in capex over the previous year. This was disclosed by the Power Ministry. For FY21, the Power Ministry has capex targets of Rs.50,691 crore. Power sector capex stood at Rs.32,137 crore till end of Nov-21. If you include the infrastructure outlays by power, the actual capex would go up further to Rs.35,629 crore. Currently, the progress of the schemes and projects are being monitored on a weekly basis by the Secretary, Ministry of Power for quick action.
In what could be a big setback for the government disinvestment collections in FY22, the LIC IPO may not happen in this fiscal due to delays in the valuation. While the DIPAM Secretary, Tuhin Kant Pandey, was still optimistic about completing the LIC IPO by March 2022, experts increasingly are of the view that it would be impractical to expect. Even after the valuation was completed, there would be regulatory gaps to be filled up. LIC IPO will have to be vetted by SEBI and IRDA. It looks like FY23 would be more practical.
Foreign portfolio investors pulled out a total of Rs.17,696 crore from Indian markets in the first 3 weeks of Dec-21. The selling was largely driven by the Omicron variant, faster tapering by the Federal and rising inflation in India. Overall, FPIs net sold Rs.13,470 crore in equities and Rs.4,226 crore in debt. The equity selling would have been much worse, but for the IPO flows from QIBs. Clearly, the over-owned banking sector is attracting the bulk of the selling by FPIs. However, other EMs have been seeing strong inflows.
Effective 20th December, Wipro will become a member of Sensex replacing Bajaj Auto. This is part of the semi-annual rebalancing of BSE Sensex. It is estimated that the rejig will result in total inflows of $154 million into Wipro and outflows of $69 million from Bajaj Auto. This would be largely passive ETF tracking adjustments. In more readjustments, BOB will replace CUB in the BSE Bankex. Also, Adani Transmission, Adani Total Gas, SRF and Max Financial will replace Biocon, PFC, Torrent Pharma, and REC in the BSE 100.
The Indian jute sector suffered notional losses of Rs.1,500 crore due to hessian bag orders worth 4.81 lakh bales diluted in favour of plastic materials for foodgrain packaging. This is despite the support provided by the centre to the June industry. That is due to millers not being able to supply that quantity of packaging material due to supply chain problems. Currently, 100% of foodgrain and 20% of sugar must be packed in jute bags only. The problems are that the ceiling for input prices are impractical in the current conditions.
Commerce Minister, Piyush Goyal, was confident of India touching $400 billion export target in FY22. According to Goyal, UAE government had committed $100 Billion investment in infrastructure in India which would facilitate the target. That would be the highest level of annual exports ever achieved by India. India’s overall exports (merchandise + services) stood at $418 billion in FY22, up 37.21% yoy. Merchandise exports in Nov-21 stood at $30 billion, but trade deficit was also at a record high level of $20.91 billion.
GAIL (India) Limited and Gujarat Alkalis and Chemicals Limited have entered into an agreement to jointly set up a 500 Kilolitres per day (KLPD) bio-ethanol plant in Gujarat and explore other business opportunities of mutual interest. The memorandum of understanding (MOU) was signed in the presence of the Gujarat Chief Minister, Bhupendra Patel. With the recent incentives to ethanol for petrol blending including the cut in GST rates from 18% to 5%, it has suddenly become a lucrative venture. It represents new energy.