Stock Market Investment Shot, 24th April 2023

Stock Market Investment Shot, 24th April 2023

Stock Market Investment Shot, 24th April 2023

Reliance Industries has confirmed that it had dropped plans to merge its subsidiary company, Reliance New Energy Limited (RNEL) into itself. RNEL is the company that will undertake the group’s new energy as well as its renewable energy business. As of now, RNEL is a who wholly-owned subsidiary of RIL and now it is likely to remain that way, without being absorbed into the parent. The whole idea was to keep the renewable franchise as a separate entity so that valuation becomes easier. It will now stay that way.

For the week ended 21st April 2023, a total of 8 out of the top 10 most valuable companies by market cap, saw combined erosion of Rs117,494 crore in market value. Infosys took the big hit losing Rs66,854 crore during the week on weak guidance. Other loses included HDFC Bank Rs10,881 crore, ICICI Bank Rs10,463 crore, TCS Rs10,319 crore, Hindustan Unilever Rs8,459 crore, HDFC Ltd Rs5,172 crore and Reliance Industries Rs4,567 crore. However, ITC gained Rs15,908 crore and SBI Rs8,746 crore in the week.

SEBI plans to allow a new category of mutual fund schemes where the AMCs can charge partly linked to performance. This is yet to be announced publicly. These additional performance-based incentives would be subject to consistent outperformance only. In such cases, the base fees would be reduced and the additional fees would be made performance driven. Globally, performance linked fees are very common in hedge funds and PMS, but not in mutual funds. This is likely to act as incentive to outperform the index.

India’s crude steel production for FY23 was up 4.18% at 125.32 million tonnes (MT). This is slightly higher than the 120.29 MT of steel output reported in FY22. The output of finished steel was 6.77% up at 121.29 MT. In FY23, the domestic consumption of steel was up 12.69% at 119.17 MT. This is largely on account of higher demand from infrastructure sector, white goods, and automobiles. For FY23, the steel exports were lower by 50% at 6.72 MT due to the skewed duty structure. Imports surged 29% to 6.02 MT in FY23.

ICICI Bank reported stellar results for Q4FY23, reporting its higher ever quarterly profit of Rs9,211 crore. The bank reported 40.2% growth in net interest income (NII) at Rs17,667 crore the fourth quarter while the net interest margin (NIM) was at a record 4.90%. This is 90 bps higher yoy and 25 bps up sequentially. The margin expansion was due to faster increase in lending rate compared to deposit rates. However, the bank also indicated that NIMs may have peaked. The gross and net NPAs also fells sharply in the quarter.

The 2 principal pilot unions; Indian Commercial Pilots Association (ICPA) and Indian Pilots Guild (IPG) sent legal notices to Air India. This pertains to the revised terms and conditions of service proposed by the company. Air India, which has been taken over by the Tata group, unveiled revised terms of employment for pilots and cabin crew. The revised terms were directly emailed to the pilots and concerned employees, which is what the unions objected to. Courts have held individual settlements as null and void in the past.

In a relief to the HDFC group, RBI has allowed the bank a leeway of 3 years to meet its priority sector lending targets in a phased manner. This would be necessary considering that the merger with HDFC would result in a substantial expansion in the asset base. However, the RBI has clarified that there would not be any concessions offered on the maintenance of CRR and SLR. These would have to be maintained with the RBI as per extant norms. Earlier, SEBI allowed moving of AMC and insurance units to HDFC Bank.

Power Mech Projects has announced bagging orders for a number of projects valued at Rs720 crore. This includes a project worth Rs362 crore for the construction of a government medical college and hospital for the Uttarakhand Jal Nigam. Then, there was another Rs162 crore order for the Revamped Distribution Sector Scheme for MPPKWCL, Khargone Circle, Indore, and railway electrification of 25 KV OHE Works, Mysuru Division. It has also got balance erection works contract from JSPL and Monnet Ispat in Odisha.

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