CPI inflation for August came in at a 4-month low of 5.3%, well within the RBI comfort limit of 6%. The CPI inflation has been steadily falling over the last 2 months. Food inflation tapered from 3.96% in July to 3.11% in August. In the last monetary policy, the RBI had upped its inflation estimates for the full year to 5.7%. The good news is that even core inflation dropped to below 6% in August. However, fuel inflation continues to remain elevated at 13%. This gives good reason for the RBI to sustain its dovish policy stance.
Commodity prices are on a run and aluminium just breached $3,000/tonne on the LME, the highest level in 13 years. While supply disruptions have been an issue, demand continues to rise in an unrelenting manner. In the last 3 weeks, aluminium has rallied 15%. Recently, the coup in Guinea has raised concerns over the supply of bauxite, a key material used in aluminium production. However, smelters are also facing rising costs. In last one year, aluminium is up nearly 70%. Most aluminium companies are at all-time highs.
Recently listed Suryoday Small Finance Bank was locked in 20% upper circuit over reports that Clix Capital was in merger talks with Suryoday SFB. That was evident from the surge in interest in the stock as volumes were up nearly five-fold. Clix Capital is a digital lending NBFC and was floated by former GE Capital head honcho Pramod Bhasin. Centrum Capital is said to be syndicating this deal. The stock of Suryoday had a disappointing listing and has been trading 55% below its IPO issue price. This must give some respite.
After almost 3 weeks of a bull rally, Reliance Industries slipped by about 2% on Monday. This fall was largely triggered by Reliance announcing that it planned to put off the launch of Jio Phones. Reliance had announced the deferment due to a severe shortage of microchips in the market. Microchips are one of the most important components of a mobile phone. Jio Phone Next was developed in partnership with Google. Instead of launching on Ganesh Chaturthi day, the Jio Phone will now be launched on Diwali day.
Two recently completed IPOs, Ami Organics and Vijaya Diagnostics, will list on Tuesday 14th September. Both the companies fixed the discovered IPO price at the upper end of their IPO price band at Rs.610 for Ami Organics and at Rs.531 for Vijaya Diagnostics. However, the GMP indications are totally opposite. For example, Ami Organics GMP is hinting at a listing price at 25% premium at Rs.767 while the GMP is hinting that the stock of Vijaya Diagnostics could list at a discount of 2.7% at Rs.521. GMP is an unofficial estimate.
HDFC Mutual Fund is now foraying into international Fund of Funds (FOF). It will launch an FOF mirroring the MSCI World Index, a collection of 1,500 constituents across 23 developed markets and covering 85% of the free float market cap in these countries. The NFO will be open from 17-Sep to 01-Oct. The idea is to provide long term capital appreciation as well as hedging domestic risk through global exposure. MSCI index has registered lower volatility than Nifty 50 and also outperformed Nifty by 350 bps in year 2021.
Radhakishan Damani floated Avenue Supermarts has forayed into Haryana with a 94,000 SFT store in Faridabad. This will be the second foray of D-Mart into the NCR region after their first store at Ghaziabad. The Faridabad store will be a one-stop outlet offering all products with great value propositions. This was after Ghaziabad store had emerged as a favourite shopping choice for home needs. D-Mart reduces the cost drastically through store efficiency and bulk buying and passes on the benefits to the end customer.
Oil India has been a surprising outperformer in the Indian market rallying nearly 76% since January 2021. Apart from elevated crude prices, Oil India has also benefited from more positive outlook on liquidity and debt. It has used the Rs.780 crore earned from the sale of stake in Numaligarh Refinery for debt reduction. Oil India currently has a debt pile of Rs.19,720 crore with nearly Rs.4,300 crore maturing this year. In the last one year, OIL has seen its net realization per barrel more than double to $69/bbl with the crude rally.