Diplomatic efforts are continuing to defuse the Ukraine situation. While U.S. officials have warned a Russian invasion of Ukraine may be imminent, Moscow has repeatedly denied that one is planned. Before the crisis flared, markets were already nervous over high inflation and the withdrawal of Fed stimulus.
Sintex loan behind the events at RBL Bank
The Reserve Bank of India’s decision to appoint an additional director on RBL Bank Ltd’s board in December may be linked to irregularities in loans to bankrupt Sintex Industries.
An analysis of data from financial information services provider Probe42 and Registrar of Companies (RoC) databases indicates RBL Bank granted a ₹140 crore loan facility to Sintex-BAPL, ignoring its deteriorating credit metrics. Group firm Sintex Industries then borrowed the funds from Sintex-BAPL to repay a ₹280 crore loan from the bank, a case of so-called evergreening of loans, where banks provide credit simply to help pay old debt. Sintex-BAPL and Sintex Industries have since been referred to bankruptcy courts for resolution. (Read here)
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Special CBI court convicts RJD supremo Lalu Prasad in ₹139-crore fodder scam case: PTI
Embassy of India in Kyiv asks Indians to leave Ukraine temporarily in view of uncertainties of the current situation: media reports
Adani Wilmar’s first quarterly results post listing show promise
Adani Wilmar Ltd December quarter results (Q3FY22), its first since listing, are not bad to start with.
In Q3, revenue from operations grew 41% year-on-year (y-o-y) and 6% sequentially to ₹14,379 crore, driven by growth across all three segments – edible oil, food & FMCG, and industry essentials. Total sales volume rose 6% y-o-y to 1.26 million tonne.
The company’s mainstay edible oil segment accounts for approximately 84% of total revenue. The segment’s market share increased from 18% in Q3FY21 to 18.9% in Q3FY22. Consequently, volumes rose 9% y-o-y. Note that, 30% of the edible oil sales comes from rural markets. With the rural sector not in very good shape at the moment, investors could closely track how the demand plays out in the segment.
Shares of the fast-moving consumer goods (FMCG) company are now around 67% above its issue price of ₹230 apiece.
SC directs Delhi HC to decide if Future Retail can be permitted to proceed with the process of seeking approvals for Reliance deal
The Supreme Court on Tuesday directed Future Group to approach the Delhi High Court asking to be allowed to proceed with the process of seeking approval from the National Company law Tribunal for its deal with Reliance Industries.
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FM Nirmala Sitharaman to hold post Budget interaction with Sebi board today
Cipla promoter group does not plan to sell any further shares in the foreseeable future: BSE filing
Y K Hamied, chairman, and Mr MK Hamied, vice chairman, who are non-executive directors and promoters, have sold 2,01,69,756 shares (representing 2.5% of the total issued and paid-up share capital of the company) today. Post this transaction, the promoter group will continue to hold 34.23% in the company. The group remains fully committed and invested in the future of Cipla Limited. The senior promoters who are both in their eighties, intend to use the funds generated from this sale for personal purposes including philanthropy.
The promoter group does not plan to sell any further shares in the foreseeable future.
Cipla today is being led by the third generation of the founding family. As a family, we are fully committed to the organisation. I will continue to carry forward the Cipla legacy and drive the company into the future – to achieve new goals and scale new heights.
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IndusInd Bank to facilitate digital transactions on National Agriculture Market
IndusInd Bank announced that it has been empanelled by the Small Farmers Agri-Business Consortium (SFAC) to facilitate digital collection and settlement services on National Agriculture Market (e-NAM) portal for the transactions between farmers and traders across the country. IndusInd Bank has been directly integrated with e-NAM platform to provide safe and hassle free payments, clearing and settlement services to the farmers and traders. Under this arrangement the bank will offer an array of transaction services through digital modes including multi-net banking, debit card, NEFT, RTGS, IMPS and UPI to the buyer and seller of the agriculture produce.
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Thermax management’s upbeat outlook is not reflecting in the stock
Shares of capital goods company Thermax Ltd surged to a new 52-week high of Rs2,174.80 intraday on the NSE on 2 February. The increased outlay for capital expenditure announced in the Union Budget on 1 February had a rub-off effect on the stock. But that optimism soon fizzled out. Currently, trading at ₹1,831 on the NSE, shares of company have slid 17% from its recent high.
Its Q3FY22 results announced on 4 February, were a miss as operating performance disappointed. Analysts point out that the company’s consolidated revenue of ₹1,610 crore, although up 14.5% year-on-year, lagged consensus estimates by 1.8%.
Since then, the stock has declined 9%.
This is depsite the management’s upbeat outlook. In a post earnings conference call, the Thermax management said, it was confident of strong order intake as capex scenario continues to improve. According to them, the company’s base business is strong amid rising enquiry levels.
Also, there is good traction from the steel sector as two big companies have announced expansion plans and there will be orders from them in the next few quarters.
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India 10-year bond erases all losses since budget, yield down 5 bps: Reuters
Indian bond yields edged lower on Tuesday after the Union government cancelled a second straight weekly debt auction on the back of comfortable cash balances, while in-line retail inflation data also aided sentiment.
The benchmark 10-year bond yield was trading at 6.62%, down 5 basis points on the day. It has now erased all losses made since the budget on Feb. 1 when the session low for the 10-year was at 6.65%.
Yields had surged sharply after the budget, with the 10-year rising to as high as 6.95% in subsequent days, on account of the record market borrowing announced for the next fiscal year and a higher-than-expected fiscal deficit target.
Rupee slips 9 paise to 75.69 against US dollar in early trade: PTI
Broader markets under pressure
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Iron ore futures plummet on fears of China market clampdown
Benchmark iron ore futures plunged on Tuesday, extending Monday’s sharp losses, as traders charged out of the commodity amid fears of a China clampdown as Beijing warned it would act against what it called the spread of misinformation on prices.
The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange tumbled as much as 9.7% to 701 yuan ($110.35) a tonne, its weakest since 18 January.
The steelmaking ingredient’s front-month March contract on the Singapore Exchange slumped by as much as 11.4% to $131.55 a tonne.
Nifty view: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
“The markets have opened in the green which seems like a knee-jerk reaction to the fierce fall of the last two sessions. One should trade the current scenario with caution. The bias still remains on the downside and for the time being, upward market movements are opportunities to look for short-selling signals for a projected target of 16300-16400. The resistance for the Nifty is at 17400-17500.”
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Gold prices hit 8-month high as Russia-Ukraine tensions mount
Gold prices climbed to an eight-month high on Tuesday, as heightened tensions between Russia and the West over Ukraine prompted investors to shun riskier assets and opt for safe-haven bullion.
Spot gold was up 0.3% at $1,876.71 per ounce, after hitting its highest level since June 11 at $1,878.88 earlier in the day. U.S. gold futures rose 0.5% to $1,879.00.
Due to the Ukraine crisis, gold is supported through the inflation channel because of higher crude oil prices and through the risk aversion channel because of lower stocks, said Stephen Innes, managing partner at SPI Asset Management.
Cipla among most active stocks on Nifty
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ACC expands capacity by 1.6 MTPA at Tikaria grinding unit in Uttar Pradesh: BSE filing
ACC Ltd., part of Holcim India, on Tuesday announced the successful commissioning of 1.6 MTPA grinding unit at Tikaria in Uttar Pradesh. The additional capacity will add the existing capacity of 2.31 MTPA, taking the total capacity at Tikaria unit to 3.91 MTPA.
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Ashok Leyland targets 40% ICV sales from CNG variants
Truck maker Ashok Leyland Ltd plans to steadily expand its compressed natural gas (CNG) range to draw in up to 40% of sales in the intermediate commercial vehicle (ICV) segment from this fuel variant, a company official said.
The move follows the truck maker losing market share in the ICV market, the biggest volume generator in the commercial vehicle space, after it deferred a CNG launch.
At the same time, Leyland continues to develop its electric vehicle (EV) and E-Mobility-as-a-service (E-MaaS) portfolio under its electric mobility arm Switch Mobility, which aims to raise $200 million-$300 million in an ongoing funding round, with an outlook for more rounds in the future. (Read here)
PBOC pumps in more liquidity, spurring gains in Chinese stocks
China’s central bank stepped up support for its slowing economy by pumping in cash via policy loans for a second straight month. The benchmark stock index advanced, outperforming regional equities.
The People’s Bank of China injected a net 100 billion yuan ($15.7 billion) into the banking system with its medium-term lending facility, while leaving the borrowing rate unchanged. The CSI 300 rose as much as 1.1%.
Chinese banks in January extended a record amount of loans after the PBOC lowered borrowing costs for the first time since 2020 last month. The latest move, seen as a prelude by many to further easing, comes as the economy struggles with repeated Covid outbreaks, a slowdown in the property sector and signs of weak domestic demand.
Top gainers/losers on Sensex in opening deals
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Cipla in focus, promoters sell stake
Promoters of drugmaker Cipla Ltd, Yusuf Khwaja Hamied and Mustafa Khwaja Hamied, will sell up to 2.5% of their stake in the company to institutional investors through a block trade that could fetch as much as ₹1,849 crore, or $244.6 million.
The block trade involves a base sale of a 2% stake with an option to increase the deal size to 2.5%, according to deal terms seen by Mint.
Cipla’s promoters held 36.11% stake in the company as of 31 December.
The shares are being offered to investors in the price range of ₹904.8 to ₹916.7 per share.
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Nifty edges higher but still below 17,000
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Sensex rises 450 points in opening deals
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Sensex recovers after early fall, up 300 points in pre-open
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Sensex lower in pre-open
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Market view: Amar Ambani, Senior President and Head – Institutional Equities, Yes Securities
Tensions surrounding Ukraine have impacted equities across the world. Heated geo-politics raise fears of disruption in world trade and further rise in crude oil price; something that the world can ill-afford, especially when all countries facing huge fiscal deficits due to support given to their economies during Covid. Back in India, banking stocks were a big drag on low sentiments, due to impact of ABG Shipyard scam on their books. These issues add to the existing overhang of US Fed possibly raising rates in March 2022. After rising from 7,500 to over 18,000, the Nifty has been consolidating since mid-October 2021. Looking at the fall of the last 30 days, it seems like the Nifty could further correct from present levels. Historically it has been observed that February tends to be volatile, especially post Budget. It is possible for the Nifty to fall up to 15,800 level. However, the long-term structure of the Indian stock market is intact. We remain bullish in 2022 and beyond. Focus on adding quality stocks in the current fall.
RBI deputy governor bats for crypto ban
Cryptocurrencies have no intrinsic value and could even be worse than Ponzi schemes, RBI deputy governor T Rabi Sankar said on Monday, advocating a ban even while India is undecided on regulating them.
“We have seen that crypto-technology is underpinned by a philosophy to evade government controls,” Sankar said at the 17th Annual Banking Technology Conference and Awards of the Indian Banks’ Association (IBA). “Cryptocurrencies have specifically been developed to bypass the regulated financial system. These should be reason enough to treat them with caution.”
According to Sankar, cryptocurrencies are not amenable to definition as a currency, asset or commodity and these should be reason enough to keep them away from the formal financial system. That apart, cryptos also undermine financial integrity, especially the KYC regime and Anti-Money Laundering and Combating of Financing of Terrorism regulations and at least potentially facilitate anti-social activities, he said. (Read here)
Delhi HC dismisses Zostel plea in relief to IPO-bound Oyo
The Delhi high court (HC) has dismissed Zostel Hospitality Pvt. Ltd’s interim petition claiming 7% holding in Oravel Stays Ltd, the parent of Oyo. This comes as a big relief to the SoftBank-backed startup that is awaiting regulatory approval for its ₹8,340 crore initial public offering (IPO) filed last year.
The Delhi HC’s single-judge bench comprising justice C. Hari Shankar passed the ruling on Monday. “While we await the full order, we believe that Zostel’s demand for issuance of 7% shares of Oyo under the arbitration award has also been rejected,” a spokesperson for Oyo said.
“This verdict vindicates our stand that Zostel has been trying to mislead the public at large. We hope this will act as a strong deterrent for Zostel’s endless forum shopping efforts and be a conclusive closure of this matter,” the spokesperson added.
Nifty view: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
“We closed below 17000 which is a matter of concern as the bears would now take over the medium-term trend of this market. The index can slide further to 16300-16400. Any up move would now become an opportunity to sell the Nifty.”
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Paytm GMV doubles to ₹83,481 cr in Jan
Digital payments and financial service firm Paytm on Monday said gross merchandise value (GMV) processed through its platform more than doubled to ₹83,481 crore in January.
Paytm’s GMV in January 2021 stood at ₹41,000 crore, the company said in a regulatory filing.
The company disbursed 19 lakh loans amounting to ₹921 crore in January, which was over threefold higher compared with four lakh loans worth ₹212 crore that the company disbursed in January 2021.
The average monthly transacting users grew 40 per cent to 6.89 crore in January, from 4.93 crore a year ago.
Oil falls on profit-taking, all eyes on Russia, Ukraine
Oil prices fell on Tuesday as investors took profits from the previous day’s rally to seven-year highs and as global stock markets slumped, although losses were capped by fears that Russia might invade Ukraine and disrupt supplies.
Brent crude futures was at $96.19 a barrel, down 29 cents, or 0.3%, after rising $2.04 on Monday.
U.S. West Texas Intermediate (WTI) crude dropped 36 cents, or 0.4%, to $95.10 a barrel, after gaining $2.36 the previous day.
Both benchmarks hit their highest since September 2014 on Monday, with Brent touching $96.78 and WTI reaching $95.82.
Russia is one of the world’s largest oil and gas producers, and fears it could invade Ukraine have driven a rally in oil towards $100 per barrel, a level not seen since 2014.
SGX Nifty up 0.47% at 16,952 in early deals
Asia shares slip; investors asses Ukraine crisis, Fed’s move
Asian stocks fell on Tuesday as traders assessed geopolitical risks, worries about Federal Reserve policy tightening and steps by China’s central bank to support growth.
Shares fluctuated in China, where the monetary authority injected a net 100 billion yuan ($15.7 billion) into the banking system with its medium-term lending facility. Equities wavered in Hong Kong and retreated in Japan.
Gyrations over Ukraine took a twist Monday, when its President Volodymyr Zelenskiy wobbled markets with what his office later said was a sarcastic comment about the rest of the world predicting a Russian attack on Wednesday.
Meanwhile, Fed officials came out with another round of views on the policy outlook. Fed Bank of St. Louis President James Bullard said the monetary authority needs to move forward its plans to raise rates to underline its inflation-fighting credibility.
Japan’s Topix index fell 0.4%, while the benchmark Nikkei 225 index was down 0.2%. Australia’s S&P/ASX 200 Index fell 0.5%, South Korea’s Kospi was flat, Hong Kong’s Hang Seng Index lost 0.1%, while China’s Shanghai Composite Index rose 0.1%.
Overnight, on the Wall Street, losses were modest, with indices recovering from a sharp sell-off after US announced plans to close its Kyiv embassy in Ukraine and sent simmering geopolitical tensions to a boil. The Dow Jones Industrial Average fell 171.89 points, or 0.49%, to 34,566.17; the S&P 500 lost 16.97 points, or 0.38%, at 4,401.67; and the Nasdaq Composite dropped 0.24 points to 13,790.92.
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