Three key events are likely to drive the stock market direction in the coming week viz; Fed meet, RBI MPC Additional meeting and the earnings season. Fed is estimated to hike rates by 75 bps but it is the language and the terminal rate indications that will hold the key. The MPC will present a report on inflation control to the Indian government. But the focus would also be on some key earnings slated this week like Bharti Airtel, Tata Steel, Larsen & Toubro, Sun Pharmaceuticals, HDFC Ltd, Hero Motocorp, Cipla and Titan Ltd.
For the week ended 28th October 2022, a total of 9 out of the 10 most valuable companies on the NSE jointly added Rs90,319 crore in market cap. Remember, this was a truncated week with 2 holidays. RIL led the way adding Rs36,567 crore in the week while HDFC Bank added Rs11,196 crore and Bharti Rs10,793 crore to its market cap. Other gainers were SBI Rs8,880, TCS Rs8,617 crore, HDFC Ltd Rs8,214 crore and Infosys Rs5,260 crore. The company to lose big value was Hindustan Unilever giving up Rs30,509 crore.
It looks happy days are here again for the IPO markets next week. The IPOs of DCX Systems, Bikaji Foods International, Global Health and Fusion Microfinance are all set to open next week. These 4 IPOs are slated to collect Rs4,500 crore between them. Global Health is the franchise that runs Medanta Hospital chain (of Dr. Naresh Trehan fame). While DCX Systems and Fusion Microfinance will also close this week, the IPOs of Bikaji Foods and Global Health will close next week. IPOs have raised Rs44,000 crore so far in 2022.
Prime Minister Narendra Modi laid the foundation stone and inaugurated the prestigious manufacturing facility for production of C-295 medium transport aircraft for the Indian Air Force. The plant, based in the state of Gujarat, will be a joint venture between the Tata group and Airbus. It is significant as it would mark the first instance of a private company making aircraft in India. Once Tata Airbus supplies 56 C-295 aircraft to the IAF, it can sell to private airlines and export the aircraft. The deal is worth Rs22,200 crore.
Amidst uncertainty in global trade, India has extended curbs on sugar exports by 1 year till October 2023. India has already emerged as the world’s largest producer of sugar and it will again restrict exports this year to ensure domestic sugar security. The export restrictions are also intended to prevent price spikes in the domestic market. That would also mean that the export quota for the second tranche may be limited to 3 million tonnes, which would make the quota for the entire sugar cycle year to 8 million tonnes.
It is said that to achieve big, you dream big and to dream big you need to invest big. Nobody understands that better than Gautam Adani, who will be investing $150 billion across businesses ranging from green energy to data centres. Adani wants to be the first in the race to scale group market cap of Rs1 trillion. While no time line has been given, this would position the Adani group among the handful of bluest of blue chip businesses globally. Nearly half of the investment will be in green hydrogen and green energy.
Chinese lending apps have been in the news in India for all the wrong reasons. After several instances of harassment of customers by China-controlled entities, government has sought stringent action from the law enforcement agencies. Chinese apps are notorious for predatory lending practices. The lending apps also use confidential data of borrowers like contacts, location, photos and videos to blackmail and harass these customers. Most of these apps insist on access to contacts and phone data storage, which is illegal.
On Friday, the RBI announced a 231 basis points higher rate of interest on the government’s Floating Rate Bond (FRB), 2034. The rate has now been pegged at a level of 7.69%. This will be the applicable rate for the 6-month period from 30th October 2022 to 29th April 2023. The floating rate was 5.38% in the previous half of the year. The floating rate bond interest has 2 components. The base rate is fixed as the Weighted Average Yield (WAY) of the last 3 auctions of 182 Day Treasury-Bills, plus fixed spread of 0.98%.