Wednesday, 4th August 2021

On Tuesday the Sensex ended 872 points higher so there was hardly any surprise that the BSE scaled the market cap level of Rs.240 lakh crore or $3.25 trillion approximately. While the Sensex got close to 54,000, the Nifty scaled the 16,000 ,mark decisively with volumes and positive FPI buying. Titan was the big gainer on Tuesday followed by HDFC, Nestle UltraTech and Bharti Airtel. Solid GST collections and the 2-month high PMI manufacturing managed to shift the sentiments in favour of buyers. Mid-caps were subdued.

The Purchase Manager Index or PMI for Jul-21 showed a sharp bounce to 55.3, touching a 3-month high and hinting at a decisive correction from the COVID 2.0 stress. This is in contrast to 48.1 in June indicating that the PMI was hinting at output expansion as well as favourable momentum. There was positive traction across various facets of PMI including output, new orders, exports, purchase orders and input stocks. Above all, job creation showed a positive build-up; ending a consistent 15-months of job losses.

Bharti Airtel reported net profits of Rs.284 crore for the Jun-21 quarter, lower than the analyst estimates of Rs.604 crore. In the Jun-20 quarter, Bharti Airtel had reported net loss of Rs.15,933 crore due to one-time provision for AGR dues. The profits were driven by Airtel’s South African operations. Total revenues for the quarter was up at Rs.26,854 crore in the Jun-21 quarter. The good news was that the EBITDA margins improved by 570 bps yoy to 49.1%. Bharti added 51 lakh 4G customers in the Jun-21 quarter. 

Adani Ports SEZ, saw a 77% jump in net profits at Rs.1,342 crore for the Jun-21 quarter. Overall revenues for the quarter nearly doubled to Rs.4,557 crore. This was possible through continuous gain in market share during the quarter. APSEZ raised its target cargo volumes to 350-360 MMT, a growth of 45%.  It recently raised funds in the international market through a dual tranche of unsecured 20-year bonds. APSEZ handled 76 MMT of cargo in Q1 FY22 against 41 MMT in Q1 FY21, a decisive and robust 83% growth.

Merchant payments provider, BharatPe, raised $370 million as part of Series E funding round led by Tiger Global Management. Apart from Tiger, Dragoneer and Steadfast also participated in the fund raising. The funds will be used to expand its existing lines of business 10-fold in 2 years. Bharat Pe will also use part of the funds to capitalize PMC Bank, in collaboration with Centrum Financial. Its principal verticals include its merchant payments business, financing business and financial services offerings to merchant partners.

With the IPO markets getting more exciting, Tata Sky is not too far behind in the race. Th unlisted Tata Sky plans to file DRHP with SEBI for a public issue. The proposed IPO could be in the range of Rs.2,000-3,000 crore and would be a mix of fresh issue and offer for sale. The IPO will provide exit to investors, including Disney. It is expected that even Temasek could be looking to monetize some of its stake in Tata Sky in the IPO. Tata Sky has 33% market share against Dish (25.5%), Bharti (25.17%) and Sun TV (16.35%).

India’s second most valuable PSB, Indian Overseas Bank, doubled its net profits to Rs.327 crore in the Jun-21 quarter. During the quarter, the net revenues were marginally down at Rs.5,155 crore due to lower interest costs resulting in lower loan yields. While interest income was down 5.6% yoy, the non-interest income was up 17.2%, as has been the case with most banks. Gross NPA still remain fairly high at 11.48% while the provisions for contingencies were lower. Provision coverage ratio for IOB stood at 91.56%. 

The IPO of the Rs.3,000 crore CarTrade Tech will open for subscription on 09-Aug and close on 11-Aug. CarTrade is a multi-channel auto platform for clients to analyse, evaluate and compare before buying and selling new and used cars. The entire IPO will constitute an offer for sale of 1.235 crore shares.  With the IPO priced in the band of Rs.1,585-1,618 per share. The issue has reserved 75% for QIBs and just 10% for retail. The founder of CarTrade is Vinay Sanghi, the former CEO of Mahindra First Choice in the year 2009.

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