Stock Market Investment Shot, 26th December 2022

Stock Market Investment Shot, 29th December 2022

Stock Market Investment Shot, 29th December 2022

The market valuation of the ten most valuable companies on the NSE fell Rs168,552 crore in the week ended 23rds December. In a week when the Nifty fell 2.4%, Reliance led the fall losing Rs42,994 crore. Other big losers included SBI losing Rs26,194 crore, HDFC Bank Rs22,756 crore, LIC Rs18,690 crore, ICICI Bank Rs16,014 crore, Hindustan Unilever Rs11,877, Infosys Rs10,436 crore  and HDFC 8,182 crore. There were no gainers in the top 10 most valuable companies as markets reacted negatively to Fed hawkishness.

With COVID again rearing its head, the government has already imposed travel restriction on 5 countries. However, the director of CCMB (Centre for Cellular & Molecular Biology) is of the view that the severity in India may not be serious as Indians have built herd immunity. However, he still insisted on responsible COVID behaviour. However, the gravity is not as much as the Delta variant. India has already reported 4 cases of this latest BF.7 variant. CCMB is confident; what is happening in China may not happen in India.

India expected to attract record FDI and FPI flows in 2023. This surge is likely to be supported by reduced risk-off, higher GDP growth in India and the rollout of PLI scheme. Also, the US tightening policy is likely to peak out by mid-2023. In 2022, India has received $42.5 billion during January-September 2022 compared to $51.3 billion in 2021. Hence FY23 looks like a record year for FDI flows. Apart from the PLI scheme, the ease of doing business and the National Single Window System (NSWS) will help in a big way.

Gautam Adani, India’s richest promoter, now will control 64.71% of NDTV. The founders, Prannoy Roy and Radhika Roy have agreed to sell almost their entire stake to Gautam Adani. It may be recollected that he had launched a hostile takeover bid by acquiring VCPL which had an indirect 29% stake in NDTV. After the open offer, Adani group already has 37% of NDTV and hence the promoter family with 32.26% stake in NDTV did not see much point in remaining shareholders. Roy family is likely to retain 5% stake in NDTV.

In a twist to the Yes Bank-Dish TV case, the bank has now transferred its 24.19% stake in Dish to JC Flowers ARC. This had been pledged by the promoters while taking a loan from Yes Bank. This is part of the move by Yes Bank to move bad loans worth Rs48,000 crore from its books to JC Flowers ARC under the proposed 15-85 structure. Now the ARC can proceed with the recovery process with greater flexibility. The dish shares had been invoked by Yes Bank after Chandra could not repay Rs5,000 crore loan against the pledge.

For the month of December, month to date, FPIs infused Rs11,557 crore net into Indian equities. There is still a week to go for the month to get over. Clearly, in the coming days, macro data and COVID news will drive FPI flows. This is less than one-third the net FPI inflows in November. However, concerns over the latest variant of COVID remain an overhang on the markets. While flows into India were positive in the month of December, flows were negative into Philippines, South Korea, Taiwan, Thailand and Indonesia.

Piramal Realty, part of Piramal Enterprises, is targeting Rs2,200 crore sales bookings for FY23, a growth of 40% yoy. It currently has over 15 million SFT of residential and commercial space under development in MMR region. The company is likely to cross revenues of Rs2,000 crore in the year. It is currently developing

around 12,000 apartments, covering 13 million SFT across 4 residential projects in Mumbai. It plans to invest Rs3,500 crore in construction over next 2 years. Piramal is focused on the premium luxury segment.

Shriram Finance Ltd is planning to raise close to Rs35,000 crore on a private placement basis to meet its growing business needs. Recently, there was a major group restructuring in the group with Shriram Capital and Shriram City Union Finance being merged into Shriram Transport Finance to form Shriram Finance. This has a much larger balance sheet. However, it also needs a lot more capital to bankroll its aggressive business expansion plans. Fund raising will be through issue of NCD, bonds or debt on private placement.

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