Gold has now corrected around 16% since Aug-20 when it had peaked at Rs.55,922 per 10 grams. With the success of the vaccine and signs of growth reviving, gold has moved from being one of the best asset classes to one of the worst-performing asset classes. Its safe haven appeal appears to be waning even as Bitcoin rally has taken some of the sheen off gold in the last few months. Experts attribute this gold price fall to a sharp dollar rally and spike in US bond yields. However, most experts expect gold to bounce back as high yields are unlikely to sustain when government borrowing programs remain at elevated levels.
Sanofi India announced its quarterly results on 23 February but what actually stood out was the Rs.125 per share final dividend and an Rs.240 per share special dividend for the year ended December 2020. The dividend payout will be done after 04-May this year. In terms of financial performance, pharma major Sanofi reported net profits of Rs.123 crore for the Dec-20 quarter showing a 26.8% growth on a yoy basis. Full-year profits were 15% higher at Rs.477 crore. Q4 revenues were lower 13% YOY at Rs.720 crore while full-year revenues were 5.5% lower at Rs.2,901 crore. During the year, Sanofi completed the slump sale of its Ankleshwar manufacturing facility to Zentiva. The operations of the company were impacted partially by the pandemic and subsequent lockdowns. The company AGM will be held on 27 April 2021.
The Rs.625 crore IPO of Gujarat-based Heranba Industries, which opened for subscription on 23-Feb, got 84.18% subscription at the end of the first day of bidding. The IPO will include Rs.60 crore by way of fresh issue and the balance Rs.565 crore by way of offer for sale. The issue will close for subscription on Thursday, 25 February. Investors can bid in lots of 23 shares and put bids for a maximum of 13 lots under the retail category. Heranba has already managed to place shares to 18 anchor investors prior to the IPO to the tune of Rs.187.50 crore. The company is into the manufacture of agrochemicals in Gujarat.
Cochin Shipyard stock saw a sharp 11% rally on 23 Feb after the company received several high value orders from the Indian Navy. The Indian Navy declared Cochin Shipyards the lowest bidder in the tender floated by the Navy for construction of 6 Next Generation Missile Vessels (NGMV). It is estimated that the total value of the orders could be to the tune of Rs.10,000 crore. This is only indicative of the eligibility and the final announcement of the contract would be subject to other extant formalities. The stock of Cochin Shipyards is trading at around Rs.383, fairly close to its 52-week high price of Rs.396 per share.
Hindalco rallied sharply by over 4% on 23-Feb after it disclosed plans to deleverage its balance sheet and reduce debt substantively. Hindalco also laid out an elaborate capital allocation framework for Capex, debt reduction and shareholder returns. Hindalco will allocate nearly $3 billion towards capex in the next five years. Hindalco does not have any major inorganic plans for now. Hindalco has targeted to generate $1.2 billion cash flow annually after regular working capital and maintenance capex. Hindalco will allocate 50% of cash flows for capex, 30% for debt reduction and 10% for shareholder returns in the future.
Reliance Industries confirmed that it had secured SEBI approval for the proposed conversion of its oil to chemicals (O2C) business into an independent subsidiary. RIL still needs to secure approval of equity shareholders, creditors, income-tax and the NCLT. The entire approval process is expected to be completed by the second quarter of FY22. The idea of hiving off O2C is to create value through strategic partnerships and attract dedicated investor capital. However, the deal with Aramco was only mentioned as one of the options for the fund raising. Morgan Stanley has lauded the move calling it the right step towards monetization. RIL will transfer all its refining, marketing and petrochemical assets to Reliance O2C. There will be no dilution of earnings or any restriction on cash flows due to this reorganization.
