Sensex gained more than 1400 points in just two days flat as it crossed above the psychological 50,000 mark on Tuesday. The Nifty also settled above the 15,000 mark comfortably. The rally was driven by heavy weights like HDFC Bank, Reliance and Bajaj Finance, even as short covering added to the rally. In an interesting turn, autos were in the limelight with M&M and Bajaj Auto among the big gainers. The COVID situation is improving and the urgency shown by the government has gone down well with the markets.
Tata Motors reported a net loss of Rs.7,605 crore for the Mar-21 quarter, largely on account of a massive Rs.14,994 crore write-off in Jaguar Land Rover, as part of its Reimagine Plan. However, this loss was lower than the net loss of Rs.9,894 crore reported in the Mar-20 quarter. Total revenues for the quarter were up by a whopping 42% at Rs.88,628 crore due to the base effect. Tata Motors showed good operating traction on the top line and at an EBITDA level in its global JLR business as well as domestic auto business.
Brent Crude breached the $70/bbl on Tuesday after hovering around these levels for some time. The surge in crude prices was led by a massive reopening of the European and US economies, which largely managed to offset the spreading Coronavirus cases in Asia. Both the US and UK have shown a sharp fall in cases and that raises hopes of a sharp spike in gasoline demand. Even the US based WTI crude was quoting higher at $66.72/bbl. However, if Iran is able to fully start oil exports, then oil prices may taper once again.
Canara Bank reported standalone profits of Rs.1,011 crore for the Mar-21 quarter, compared to a net loss of Rs.3,259 crore in the Mar-20 quarter on the back of a sharp fall in bad loan provisions. Total income was up by almost 50% at Rs.21,523 crore due to the consolidation of the Syndicate Bank operations, which was merged into Canara Bank in the previous year. Gross NPAs at 8.94% remain a worry even on an absolute basis. Bad loans in the quarter surged by Rs.60,288 crore, and the COVID effect is not fully known.
SBI led consortium moved one step closer to recovering their debts to Vijay Mallya, which he had allegedly siphoned out of Kingfisher Airlines into his personal accounts. Judge Michael Briggs of the Chief Insolvencies and Companies Court delivered his judgment in favour of the banks. Clearly, there was no public policy preventing a waiver of security rights as demanded by Mallya’s lawyers. Judge Briggs agreed with the stance of Justice Gowda on relinquishing creditor security. Indian banks were also granted costs.
Federal Bank board cleared an investment of Rs.148 crore into its subsidiary Fedbank Financial Services via a rights issue. The objective of the rights issue was to infuse regulatory capital into Fedbank Financial. FFSL is a non-deposit taking systemically important NBFC with FY21 turnover of Rs.698 crore and an asset size of Rs.5,466 crore. Federal Bank holds 74% in FFSl and has agreed to complete the subscription under the rights issue at Rs.70 per share in cash with a time frame of 2 months. The stock was up 3.9% on BSE.
Adar Poonawalla of the Serum Institute confirmed that he had offloaded his entire stake in Panacea Biotech to the tune of 5.15% for a consideration of Rs.118 crore. It was an open market transaction. The shares were picked up by Serum Institute of India. A total of 31.57 lakh shares were sold at Rs.373.85 per share. This will increase the stake of Serum Institute in Panacea Biotech from 4.98% to 10.13%. Adar Poonawalla is currently in London and it is not clear when he plans to return to the thick of action in India.
The SUUTI, which holds shares of the erstwhile beleaguered US-64 in the government account, is likely to offload 3.60 crore shares in Axis Bank at a floor price of Rs.680 per share. The total deal could be worth Rs.2,448 crore. This represents 1.21% of the paid-up capital of Axis Bank. The sale will be done through the OFS route on May 19 and May 20, subject to SEBI approval. However, based on demand patterns, the government may choose to sell up to 5.8 crore shares for Rs.3,950 crore, a boon for divestment targets.