The Easy Trip IPO was subscribed 159.33 times on the last day of bidding on 10 March. While retail was subscribed 77.4X, the HNI portion was subscribed 382.21X and the QIB portion was subscribed 77.53X. The IPO had been priced in the band of Rs.186-187 per share and based on the response it is likely to be fixed at the upper end of the band. The Easy Trip IPO was entirely an offer for sale with the two initial promoters selling part of their stake in the company. Easy Trip happens to be the largest online travel agency in India in terms of gross revenues. This IPO is another in the list of successful IPOs in Mar-21.
The RBI announced that IDBI Bank was out of the “Prompt Corrective Action” or the PCA framework after it showed a clear improvement in its finances. This will allow IDBI, after a gap of 4 years, to get more flexibility to lend and expand its business. This decision was taken after the RBI Board for Financial Supervision reviewed the performance of IDBI Bank in its 18-Feb meeting. PCA decision is taken based on regulatory capital adequacy levels, net NPAs and the leverage ratio. IDBI Bank had been put under the PCA framework in the year 2017 which had placed curbs on lending and spending. IDBI has also reportedly apprised the RBI about the structural and systemic improvements put in place to meet its capital and NPA commitments in the future. IDBI Bank had posted net profit of Rs.378 crore in Dec-20 quarter.
A research report by SBI has projected the combined central and state fiscal deficit for FY21 at 12.7% of GDP. This spike in the overall fiscal deficit is expected on the back of higher healthcare spending and a sharp fall in revenues in the aftermath of the pandemic. The research report noted that the average state fiscal deficit across 13 states had scaled beyond 4.5%. The report also added that the fiscal situation had made the balance sheet of many states rather tenuous. While the Finance Ministry has projected the central deficit at 9.5% of GDP, the SBI research report projects central fiscal deficit lower at 8.7%.
A recent report by Morgan Stanley has opined that cement companies in India could be on the cusp of a new upward growth cycle and expects most stocks to create sustained value in the medium to long term. Morgan Stanley expects broad-based and above-average demand growth of 9% per year over the next 3 years and has upgraded earnings estimates by 1%. Margins are also expected to remain robust. Morgan Stanley has upgraded Grasim to overweight and has retained overweight on Ambuja Cements and Ultratech. However, Morgan is neutral on Shree Cements and ACC and underweight on Dalmia Bharat.
PSU stocks have been in the limelight of late but there are some unlikely winners too. MTNL and HMT rallied up to 17% to touch 52-week highs during the week. Both stocks have gained close to 80% in a span of less than 3 weeks even as the benchmark indices have struggled to find direction. This rally came after reports that the government had identified real estate and land assets of MTNL to set in motion the PSU asset monetisation programme for the fiscal year FY22. The rapid growth in the food processing industry is fuelling the demand for equipment in the sector and that is giving an indirect boost to machine tools.
If you thought that only in the US fund managers struggled to beat the index, think again. In India, mutual fund managers raised exposures to 17 stocks for 4 quarters in succession, but more than 50% of these stocks lagged the Sensex returns. Some of the fund manager picks that disappointed in terms of returns included stocks like Zydus Wellness, V-Mart, Page Industries, CCL Products, Fortis Healthcare, Orient Electric and Phoenix Mills. The ET study only considered BSE-500 companies. While all the above names gave lower returns than the Sensex, Phoenix ended with negative returns. But, mutual fund managers did succeed in catching some winners too. Stocks like India Energy Exchange, Just Dial and Birlasoft, where MFs had raised their stakes, have outperformed the Sensex by a huge margin. Perhaps it just evens out.