Monday, 3rd May 2021

Five states have given out clear messages in assembly elections. While the DMK swept Tamil Nadu and the LDF took Kerala, there was little surprise that the BJP dominated Assam and Puducherry. The big bet was always on West Bengal, as the TMC and the BJP were apparently headed for a close finish. However, the pundits proved to be awfully wrong as the TMC swept West Bengal and even bettered its 2016 tally. The West Bengal election outcome may act as a temporary dampener to market sentiments on Monday.

In the Nifty, 7 out of the top-10 most valuable companies by market cap added Rs.162,775 crore during the week. The biggest contributions came from RIL and Bajaj Finance. Reliance Industries added Rs.57,087 crore in market cap while Bajaj Finance added a whopping Rs.47,526 crore after stellar results. Among other gainers, ICICI Bank added Rs.21,033 crore, SBI Rs.15,172 crore, HUL Rs.10,761 crore and Infosys Rs.8,560 crore. Among losers, TCS lost Rs.26,411 crore and HDFC dropped Rs.13,917 crore in market cap.

As per early estimates from the Ministry of Commerce, India’s merchandise exports grew 16% MOM to $30.21 billion. This was triple of Apr-20, but that was an exceptional bad base and hence not comparable. The spike in outbound shipments in April was triggered by petroleum products, engineering and gems & jewellery. Interestingly, COVID did not really impact exports. Merchandise imports in Apr-20 is pegged at $45.45 billion leading to a trade deficit of $15.24 billion. Gold, oil and electronics imports led the charge.

Government has extended the important compliance timelines for income tax and GST even as it waived late fees in most cases. The idea was to give a breather to MSMEs and to mid-sized companies in a tough macro environment. It has extended dates for belated income tax returns, GSTR-1, GSTR-3B, filing of appeals etc. The GST filing due dates have been extended by a month. Interest rates on delayed payments has also been halved. Most states have extended the stringent lockdowns well into the month of May.

After 6 successive months of net buying in equities, foreign investors pulled out Rs.9,659 crore from equities in April 2021. They appeared to be spooked by the intensity of the resurgence of COVID and the inordinate delays in the vaccination program. This is the first net withdrawal from equities by FPIs since Sep-20, when they had pulled out Rs.7,782 crore from equities. FPIs had infused $37 billion in FY21, out of which $27 billion came between Oct-20 and Mar-21. Steep commodity prices also affected sentiments.

Indian companies raised $9.23 billion via ECBs in the month of Mar-21; up by 24%. In comparison, Indian companies had raised only $7.44 billion in Mar-20. Out of the $9.23 billion of ECB borrowings, $5.35 billion came through the ECB approval route while the balance $3.8 billion came in via the automatic route for raising ECB funds. Indian companies did not raise any funds through rupee denominated Masala bonds. IRFC, ONGC Videsh and REC raised ECBs via the approval route. IRFC alone raised $3.33 billion via ECBs. 

Vodafone Group PLC has entered into an agreement to jointly develop data services with the cloud division of Alphabet Inc. It may be recollected that Alphabet Inc is the holding company of Google. Nearly 1,000 employees in the UK, Spain and the US will work on their new cloud-based storage and analytics portal, Nucleus. It is estimated that Nucleus will process around 50 terabytes of data per day within the cloud. The agreement is for 6 years and will offer huge data movement to cloud for other companies. 

CarTrade, an auto classifieds company, will be filing the DRHP with SEBI for its proposed IPO in next 15 days. It will go down as the first online auto classifieds company to go public in India. The company plans to raise a sum of Rs.2,000 crore via the IPO which will be a combination of fresh issue and an offer for sale (OFS). CarTrade has the backing of marquee investors like Warburg Pincus, Temasek, JP Morgan and March Capital. CarTrade is a platform to buy and sell new and used cars. It owns 51% in Shriram Automall. 

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