Stock Market Investment Shot,19th December 2022

Stock Market Investment Shot, 21st December 2022

Stock Market Investment Shot, 21st December 2022

Advance tax collections for the FY23 period to mid-December is up 12.8% yoy at Rs5.21 trillion. This is the combined figure for personal and corporate taxes. Corporate advance tax accounts for the bulk of Rs3.97 trillion while personal taxes accounted for Rs1.24 trillion. Advance tax is paid in four tranches each year and is a reliable barometer of economic activity. Direct tax collections, net of refund, were up 19.8% yoy for the same period at Rs11.35 trillion. Personal income taxes includes STT also. The signals are positive.

For the week ended 16th December 2022, a total of 9 out of the top 10 most valuable companies on the NSE by market cap saw value erosion of Rs122,093 crore. Reliance was the biggest laggard as Nifty fell over 1.3% in the week. Among big value losers were Reliance Industries Rs29,768 crore, TCS Rs19,960 crore, ICICI Bank Rs19,722 crore Infosys Rs19,568 crore, HUVR Rs11,936 crore, SBI Rs11,736 crore, Bharti Airtel Rs7,204 crore & Adani Enterprises Rs1,904 crore. The sole gainer, HDFC Bank, added Rs4,126 crore.

Edelweiss Alternatives signed a deal with Larsen & Toubro and Canadian Pensions to pick up 100% stake in L&T Infrastructure Development Projects at an enterprise value of Rs6,000 crore. They will also absorb the operational team. The portfolio acquired comprises 8 road projects spanning 4,900 lane kilometres and 1 power transmission asset spanning and 960 circuit kilometres. The Edelweiss platform now will have
26 assets with annual revenues of nearly Rs2,700 crore. Edelweiss Alternatives has an AUM of $5.5 billion.

Sugar stocks rallied between 5% and 19% on Friday on heavy volumes on hopes that the government would enhance the sugar export quota for the sugar cycle year (SCY) 2022-23. The SCY is from October to September next year. In November, government had approved 60 lakh tonnes of exports for SCY 2022-23 which is almost half the 111 lakh tonnes of sugar exported in SCY 2021-22. With sugar production likely at 36.5 MT, India would still have export surplus of 9 MT after factoring consumption and ethanol needs.

ITC hit a 2-month low of Rs331.90 and has now lost 8% from its October highs. One reason being cited is that market is wary of the likely impact of the competitive pressures to be imposed by Reliance launching its own FMCG brand (Independence). ITC is the second largest FMCG player in India and its portfolio has biscuits, noodles, snacks, chocolates, dairy and personal care products. Reliance FMCG plays to foray into food, beverages and daily essentials and is likely to give a tough time for competition with its retail reach.

Year 2023 could see 89 companies raising close to Rs1.40 trillion through the IPO route. In 2021, Rs1.19 trillion was raised by 63 companies but 2022 was disappointing with just Rs55,146 crore raised by 33 firms till November 2022. However, with market at all-time highs, most fund managers and investors are again starting to look at IPOs to generate alpha. The IPO market took a dent after the post listing show of digital stocks like Paytm, Zomato, Nykaa and Policybazaar. In 2022, the LIC IPO also dented market sentiments.

IDFC First Bank is taking the initiative to launch zero-fee banking. It is estimated that banks are collecting over Rs15,000 crore annually from charges like cheque book fee, AMQB fees, IMPS fees, RTGS fees, charges for SMS alerts, charges for ATM usage etc. IDFC First Bank has decided to waive most of these charges for its customers. Today, most of the account holders don’t realize the impact of such fees, but it cumulative adds up to a windfall for the banks. The central bank has also not done much on regulating it.

A unit of Temasek of Singapore submitted the highest bid for TPG’s 21% in Manipal Health, valuing the hospital chain at more than $4 billion. Temasek already holds 18.1% stake in Manipal Health, so this deal should take their stake close to 40%. It is not yet clear if NIIF and Ranjan Pai will also sell an additional stake to Temasek. TPG will earn multi-fold returns on its 2015 investment in Manipal Health. Its current total bed count is over 7,000 across India. For FY21, it had net sales of Rs1,813 and net loss of Rs138 crore.

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