Oil appears to be on a boil as the price of WTI crude touched a 7-year high of $76.91/bbl. Brent is higher at $77.78/bbl, but the spread has substantially narrowed. The OPEC talks collapsed on Tuesday after many OPEC members, including UAE, hinted at the need to push OPEC output by 400,000 bpd from August. Many OPEC nations are worried that if oil scaled higher then it could destroy demand leading to long term destruction in oil prices. There have been no timelines for resuming talks, though members are optimistic.
The Rs.3,621 crore OFS of NMDC got subscribed 1.15 times in the institutional offer. The government got bids for 220.45 million shares against 219.5 million shares offered. About 21.95 million shares out of this is reserved for retail investors, which will be offered to retail on 07 July. The floor price of Rs.165 was well below the market price, making the OFS attractive. This represents 4% of the base offer and 3.49% of the green-shoe option. That means, the government will retain the full green-shoe portion also, selling 7.49%.
Tata Motors gave up nearly 10% from the peak after Jaguar Land Rover guided operating cash outflow of about £1 billion, plus negative EBIT margins in the Sep-21 quarter. This is largely driven by supply strain caused by the pandemic as well as the tremendous shortage of chips that most of the auto companies are facing globally. In the Jun-21 quarter, JLR had reported 68% growth in retail sales numbers. However, JLR still sees strong demand for its products when semiconductor supply ultimately improves to normal levels.
SAT will hear the case related to PNB Housing Finance-Carlyle deal on Monday 12 July. The SAT order was scheduled for 05 July, which got postponed by a week. PNB Housing had filed an appeal with SAT against the SEBI order asking them to put the share placement on hold till due diligence was done. Carlyle, with other investors, will infuse Rs.4,000 crore into PNB Housing which will make Carlyle the majority owner. Proxy firms had objected to the fund raising method, cheap valuations and absence of control premium.
The stock of AU Small Finance Bank rallied 11% to Rs.1,142 after the bank stated that its absolute gross NPAs had remained stable in the Jun-21 quarter. Slippages, net of recoveries, had fallen to Rs.8 crore. While the GNPA ratio would remain stable around 4.3%, the restructured loans are expected to spike from 1.8% to 3.8%. The series of lockdowns on account of COVID 2.0 resulted in a 2% sequential fall in gross advances in the Jun-21 quarter. On a yoy basis, deposits were up 38%, largely supported by CASA deposits.
Force Motors stock rallied by 13% on Tuesday 06 July to Rs.1,369 after the company reported doubling of auto sales in June 2021. Force Motors had sold 1,925 units in June 2021 compared to just 860 units in June 2020. Sales were also up sharply on a sequential basis compared to May-21. The company witnessed an overall growth of 107% in domestic sales and a 216% jump in export sales for the month of Jun-21. However, while announcing a loss in the Mar-21 quarter, Force guided for COVID pressure in FY21 too.
GST collections for June 2021 fell to Rs.92,849 crore due to pandemic lag effect, falling below Rs.1 trillion for the first time in 9 months. GST collections of June 2021 pertain to transactions in May 2021, which was the peak of COVID 2.0 impact. The E-Way Bills data for May shows that number of E-Way bills fell sharply from 5.88 crore in Apr-21 to 3.99 crore in May-21. The break-up of GST collections were; Central GST Rs.16,424 crore, State GST Rs.20,397 crore, Integrated GST Rs.49,079 crore and cess Rs.6,949 crore.
The non-convertible debenture (NCD) issue of IIFL Home Finance Ltd will open on 6 July and close on 28 July. The issue has been rated AA and offers an effective yield of 9-10%. The base issue size of the NCD has been fixed at Rs.100 crore with green-shoe option to retain another Rs.900 crore, aggregating to Rs.1,000 crore. The company plans to use the proceeds of the issue for onward lending, financing and for repayment / prepayment of interest and principal of existing borrowings. Tier-1 capital stands at 19.61%.
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