Sensex ends above 63,400, Nifty gains 120 pts; HDFC Life, Apollo Hosp, SBI shine

Indian shares inched up by around 0.7% on Tuesday, buoyed by gains in HDFC Life Insurance and Banking stocks, while the stock exchange pushed a market holiday to Thursday from Wednesday.

The blue-chip Nifty index gained 125 pts to close at 18,817, while the S&P BSE Sensex rose 450 pts to end above 63,400, at 63,416.

The shift in the Eid market holiday came after the government of Maharashtra state, where India’s financial capital Mumbai is located, changed the date for the holiday late on Monday.

The National Stock Exchange also said the expiry date for June futures and options contracts is now revised to June 28 from June 29 earlier.

Among stocks, HDFC Life Insurance was the top gainer on the Nifty 50, rising by 5.5%. Aditya Birla Capital climbed as much as 2.6% on plans to raise $213 million through a share sale. Other major climbers were SBI, HDFC twins, Airtel and Apollo Hospitals. Cipla, Britannia and Tata Consumers dragged in today’s session as they shed a per cent each.

Thirteen of the 15 Nifty broad-based sectoral indices ended in the green with Bank, Finance and Realty indices gaining more than a per cent. Metal and IT were other major climbers. Energy and FMCG ended in red with minor losses.

Asian stock markets were mixed Tuesday after Wall Street drifted lower following its latest rally. Japan’s Nikkei share average headed for a fourth straight decline on Tuesday, as investors continued to take profits following the index’s surge to a 33-year peak last week.

The Nikkei slid 0.77%. It fell as much as 1.2% earlier in the session. The broader Topix slipped 0.57%.

China and Hong Kong stocks rose, led by property shares as sentiment was lifted on fresh hopes for stimulus, while investors watched Sino-U.S. tensions for any signs of easing.

China’s blue-chip CSI300 Index closed up 0.9%, while the Shanghai Composite Index gained 1.2%. Hong Kong benchmark Hang Seng Index was up 1.9%.

European shares rose on Tuesday as miners gained after hopes of more policy support from China lifted metal prices, while shares of JD Sports dipped even after the British retailer stuck to its profit forecast.

British equities rose at the open on Tuesday as commodity-linked stocks such as miners and energy tracked gains in oil and metal prices, while PZ Cussons fell after the soap maker issued a profit warning.

On Tuesday, IDFC First Bank announced its plan to raise ₹1,500 crore through tier-2 bonds in the Indian bond market. The private lender informed the Indian stock market exchanges about the allotment of ₹1,500 crore worth of tier-2 bonds. The privately placed bonds are issued as unsecured, subordinated, rated, listed, non-convertible, fully paid-up, taxable, redeemable Basel III compliant tier-2 Bonds (in the nature of debentures) at a face value of ₹1 crore each. These bonds were raised through private placement on the NSE E-bidding platform. (Read More)

Byju’s, the Indian education-technology firm, is facing increased scrutiny and damage control efforts after losing its auditor and three board members within a week. The startup, which was once seen as a symbol of India’s internet boom, is now facing regulatory and investor scrutiny.

Founder Byju Raveendran has personally reached out to investors in recent days to assure them that the company will release its long-delayed financials and strengthen its accounting processes. In a call with investors, Raveendran acknowledged the failure to implement effective processes that could have facilitated timely financial closing. He mentioned that the company is working on improving its systems with the assistance of a newly appointed finance chief and general counsel, as reported by individuals familiar with the discussion.

According to a report by the Economic Times (ET), the Securities Appellate Tribunal (SAT) provided interim relief to IIFL Securities by staying the order issued by the Securities and Exchange Board of India (SEBI) against the brokerage. The SEBI order had prohibited IIFL Securities from accepting new clients for a period of two years.

Following the stay order, the shares of IIFL Securities experienced a significant surge, with their value increasing by over 6% and reaching a day’s high of ₹65.79.

The regulatory action was initiated by SEBI last week, as IIFL Securities was found to have violated the code of conduct regulations. In response, IIFL Securities filed an appeal with the Securities Appellate Tribunal (SAT) against the SEBI order. (Read More)

Hindustan Aeronautics Ltd on Tuesday approved stock split in the proportion of 1:2 and declared a final dividend and of ₹15 for the FY 2022-23.

The company in its regulatory filing informed of stock split of existing one equity share of face value of ₹10 each fully paid up into two equity shares of ₹5 each fully paid up.

“The Board recommended stock split of existing 1 equity share of the face value of ₹10 each fully paid up into 2 equity shares of ₹5 each fully paid up,” said HAL in a filing. (Read More)

On Tuesday, the central government announced that it will release tur dal from the buffer until imported stocks arrive in the domestic market. The Ministry of Consumer Affairs, Food & Public Distribution stated that the National Agricultural Cooperative Marketing Federation (Nafed) and the National Cooperative Consumers Federation (NCCF) have been instructed to conduct online auctions for millers to dispose of tur dal.

The quantities and frequency of the auctions will be determined based on the assessed impact on the availability of tur dal to consumers at affordable prices, according to the ministry’s statement. This move aims to ensure a steady supply of tur dal in the market until the imported stocks become available. (Full Story)

Magson Retail and Distribution IPO has been subscribed 3.03 times so far on June 27, Tuesday, the third and the last day of the bidding process. The public issue received bids for 60.88 lakh equity shares as against 24.14 lakh shares on the offer.

As per the data from chittorgarh.com, Magson Retail IPO has been subscribed 4.49 times in the retail category and 1.57 times in the NII category. Qualified Institutional Buyers (QIB) are yet to put their bids till 2:00 PM.

Magson Retail and Distribution IPO opened for subscription on June 23 and will be available for subscription till June 27. The ₹13.74 crore worth SME IPO is a fresh issue of 21.14 lakh equity shares at a fixed price of ₹65 each.

Adani Enterprises Ltd, the flagship company of the Adani Group, has set a record date to determine eligible shareholders for the payment of a dividend of ₹1.20 per share or 120%. The board of directors of Adani Enterprises Ltd has decided that the record date for identifying beneficiary shareholders for the dividend payment will be 7th July 2023. On this date, the company will finalize the list of shareholders who will receive the dividend. (Read More)

Kunal Vora, Head – India Equity Research BNP Paribas India has shared his views on Consumer Report June 2023: 

Slow pace of price cuts may increase competitive intensity

· Growth has been pricing led; reluctance to take price cuts may lead to increased competition from unorganised players

· Category highlights: Large cumulative price hike over the last two years could keep volume growth in check

· Industry view: We see risk to the street’s revenue and earnings estimates even as margin comfort is improving

· Pricing action analysis amid deflationary raw material cost

o Soaps: Sharp price hikes over the last two years; partial reversal underway

o Revenue growth in soaps likely to remain muted

o Coconut hair oils: Marico passes on the benefits to customers; Dabur looks to premiumise

o VAHO: Price hikes in the value segment; premium VAHO stable

o Oral care: Revenue growth under pressure despite price hikes; recovery might take time

o Detergents: No cuts in powder; bar sees some price cuts

o Edible oils: Prices are lower y-y as well as on a two-year CAGR basis

· Price trends in 1QFY24: Selective cuts visible in commodity-led categories

o Beauty and personal care: No significant price cuts despite drop in RM prices

o Packaged food: Price hikes of dairy products, stability for biscuits, edible oils

o Home care: Price cuts in detergents; dish wash and HI remain stable· 

Prathamesh Mallya, DVP Research, Non-Agro Commodities & Currency, Angel One Ltd. Outlook on:

GOLD: Gold prices are likely to see an uptick, given the political unrest in Russia. However, the rival safe haven dollar might cap the upside gains.

CRUDE: We expect crude to trade higher towards 5850 levels, a break of which could prompt the price to move higher to 5930 levels.

BASE METALS: We expect copper to trade lower towards 711 levels, a break of which could prompt the price to move lower to 707 levels.

The Competition Commission of India (CCI), the country’s fair-trade regulator, has served a show-cause notice to Air India, which is now owned by Tata Group. The notice seeks an explanation as to why an investigation into Air India’s proposed merger with Vistara should not be initiated. Two individuals familiar with the matter have provided this information.

The Tata Group, which owns Air India, has a period of 30 days to respond to the notice and seek approval from the CCI for the merger of the two airlines. If Tata Group can address the concerns raised by the CCI within this timeframe, the merger may proceed without further investigation. (Read More)

The initial public offering (IPO) of Cyient DLM Ltd received a subscription rate of 82% on the first day of its opening. The public issue, which started accepting subscriptions on Tuesday, June 27, will remain open until Friday, June 30.

The IPO witnessed a positive response from retail investors, with the retail portion being subscribed 3.56 times. The employee portion received a subscription rate of 12%.

On the other hand, non-institutional investors (NIIs) subscribed to 81% of the issue, while there was no subscription from qualified institutional buyers (QIBs). (Read More)

Gaurav Bissa, VP, InCred Equities: AB Capital witnessed strong correction since getting listed on the Indian bourses. However, the fortunes changed since 2020 with stock gaining momentum as the months passed. The stock confirmed trend reversal in November last year with the formation of higher highs and higher lows. Since then, the stock witnessed some consolidation and made a retest of 6-month breakout post which it picked up the pace. The stock has been respecting its 21ema on the weekly charts which implies any decline towards 155-160 can be used for entering the stock for long-term perspective. The market participants who bought the stock earlier at lower levels can continue to hold with 21wema as trailing stoploss for an upside till 230 levels.

Tata Technologies Ltd, a subsidiary of Tata Motors, has been granted approval by the Securities & Exchange Board of India (SEBI) to raise funds via an initial public offering (IPO). The Tata Technologies IPO will solely comprise an offer for sale (OFS), wherein the company intends to sell up to 9.57 crore equity shares, representing approximately 23.60% of its paid-up share capital. This information was outlined in the Draft Red Herring Prospectus (DRHP) submitted in March. (Read More)

Trading at the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) will be suspended on Thursday, instead of Wednesday. According to the information provided on the official website of the NSE, the holiday for the Bakri Id festival has been rescheduled to the following day, which is June 29, 2023.

The revision of the stock market holiday for Bakri Id in 2023 has been made by the NSE, and the official website of the NSE reflects the change, shifting the holiday from June 28, 2023, to June 29, 2023. (Read More)

CreditAccess Grameen Limited, the country’s largest Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI), has signed a syndicated social loan facility of up to USD 200 million, qualifying as ECB under the automatic route of the RBI. The company said in a statement that it has received USD 160 million in commitments to date, along with a green-shoe option to raise an additional USD 40 million, exercisable over 120 days from the date of signing of the facility agreement. The company has currently drawn USD 100 million, and the remaining commitments shall be drawn over the coming months.

China’s second-ranking leader, Premier Li Qiang, announced on Tuesday that the country’s economic growth has accelerated in the latest quarter. He expressed confidence that China can achieve the official target of 5% set by the ruling Communist Party for the year.

During a conference held in Tianjin, Premier Li did not provide a specific figure for the economic growth in the second quarter but mentioned that it was higher than the previous quarter’s 4.5%.

After a notably weak growth rate of 3% in 2022 due to the impact of COVID-19 and associated restrictions, the world’s second-largest economy experienced a rebound following the easing of travel and business activity controls. However, this rebound was not as sustained as expected. Both consumer and factory activity weakened in May, and there was a surge in youth unemployment, reaching record levels.

Jignesh SHIAL and Mayank AGARWAL of InCred Equities: Credit card spending at an all-time high

■ Credit card industry saw a historically highest monthly spending in May 2023 at Rs1.4tr (+23.7% yoy/5.9% mom) which, we feel, is due to holiday spending.

■ Fresh credit card issuance also remained strong with ~1.2m cards issued, mainly led by SBI Cards (~0.28m) followed by HDFC Bank (~0.24m).

■ Monthly RBI data on advances indicates a strong growth momentum in credit card loans at +30.1% yoy (Apr 2023), despite consistent pressure on revolvers.

Card spending at a new high; HDFC Bank dominates market share

The credit card industry witnessed a historically high spending in May 2023 at Rs1.4tr (+23.7% yoy/+ 5.9% mom) which, we believe, is attributable to summer holidays and consumption related to the same. We expect some sluggishness in the trend amid the monsoon season-led slowdown before the festive season momentum build-up. Interestingly, HDFC Bank continued its dominance with its overall market share at ~28.6% (~27.7% in May 2022) followed by ICICI Bank at ~17.4% (~19.2% in May 2022), SBI Cards or SBIC at ~16.9% (18.7% in May 2022), and Axis Bank at 12.3% (8.4% in May 2022).

On Tuesday, the shares of Axiscades Technologies reached a 52-week high for the third consecutive session and were locked in a 5% upper circuit. Analysts have noted that the stock has been consistently moving in a 5% circuit over the past three sessions, indicating an ongoing upward trend.

Nevertheless, analysts caution that this is a low volume counter, and therefore, it is advisable to exercise caution. They highlight that the stock has immediate support around 440, while resistance can be expected at 500. (Read More)

Sameer Bhise, JM Financial Institutional Securities, sectoral update on Affordable HFCs: We initiate coverage on two Affordable Housing Finance Companies (AHFCs) viz. Home First Finance and Aptus Value Housing Finance with a BUY rating and reiterate our positive stance on Aavas Financiers (rated BUY as well). Our favorable view stems from large growth runway given significant under penetration, strong RoRWA profile and valuations which are now more palatable. The opportunity in the housing finance space in India remains a multi-decadal one with significant underpenetration (~100m units housing shortage), rising urbanization trends (40% population by 2030e), low mortgage penetration (11.7% of GDP) – more so in states with large housing shortages and policy environment which bodes well for affordable home ownership. Riding on the growth opportunity, these companies have built robust business models around the affordable segment (avg ticket sizes of 0.8-1.2m) with focus on both salaried as well as self-employed customers. The underwriting practices have now been time tested through difficult periods of Covid19, periods of NBFC liquidity crises as well tepid economic growth environment. Credit costs have been low despite the perceived risk in the customer segment though the models remain operationally intensive and process adherence, understanding of local nuances and cashflow profile of customers remain critical parameters for profitability. Overall, what stands out is the strong RoRWA profile of these entities with healthy growth outlook (Avg RoRWA over FY24/FY25 for HFFC, Aavas and Aptus at 6.5%/6.9%/12.1% respectively).We expect HFFC, Aavas and Aptus to deliver avg ROE of 15.4%/15.5%/17.4% over FY24-25e with avg RoAs of 3.6%/3.6%/7.1% respectively. Valuations are now much below highs seen over the last couple of years (~50% correction in valuations in last 18mths for Aavas and 30% for Aptus) while the fundamental performance only reinforces strong medium-term upsides. We rate all the three names as BUY with HFFC as our top pick.

As the share market opens for trade on Tuesday, positional investors would be looking at some income beyond the movement of their portfolio stocks. For, such stock market investors, it would be interesting to know that eight stocks are going to trade ex-dividend today. Those eight dividend-paying stocks are Thangamayil Jewellery, Bombay Oxygen, Sagarsoft, Silicon Rental, Welspun India, Supreme Petrochem, Anant Raj and Shriram Pistons. (Read More)

Aditya Birla Capital, an Indian financial services firm, has put forth a proposal to raise funds through a qualified institutional placement (QIP). According to a term sheet obtained by Reuters, the company intends to issue equity shares valued at up to 17.5 billion rupees ($213.5 million) through this placement.

The issue price for the QIP is set in the range of 170 rupees to 176 rupees per share, representing a discount of 6.2% to 2.9% compared to Monday’s closing price of 181.25 rupees.

The funds raised from this exercise will be utilized by Aditya Birla Capital for various purposes, including investment in its units, joint ventures, associates, and other corporate endeavors.

Today marks the opening of the initial public offering (IPO) of Cyient DLM Ltd, which will be available for bidders until Friday, June 30, 2023. The book build issue will remain open for subscribers during this period. The price band for the Cyient DLM IPO has been set at ₹250 to ₹265 per equity share. The company, an electronic manufacturing services provider, aims to raise ₹592 crore through this public offer by issuing fresh 22,339,623 shares.

Prior to the opening of the public issue, shares of Cyient DLM Ltd have become available in the grey market. Market observers report that these shares are being traded at a premium of ₹100 in the grey market today. (Read More)

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: An important feature of the rally that took the Sensex to record high was its weak structure and lack of enthusiastic investor participation. The market lacks momentum to take it convincingly to new highs. There is no support from the mother market US, either. The S&P rally of 13.6% YTD was led by just 10 tech stocks. Such concentrated rallies are unlikely to last long. In India, even though the rally is more broad based, there is no valuation support to take the market much higher. So investors should wait and watch for clearer direction from the market.

Early next month expectations regarding Q1FY24 results will influence the market. Investors may wait for cues from the results to know which sectors will outperform for the rest of the year.

The Indian rupee started the trading session on Tuesday with a stronger position against the US dollar, benefiting from the overall gains in Asian currencies, particularly the recovery of the Chinese yuan. The rupee opened at 81.97 against the dollar, compared to the previous day’s close of 82.04.

In related news, the offshore yuan also experienced a rise of 0.3% against the US dollar, reaching 7.2220. This development followed the announcement by the People’s Bank of China, which set the USD/CNY mid-point lower than expected by approximately 100 pips. This move by the central bank could potentially indicate its discomfort with the rapid decline of the yuan, as reported by Reuters.

Deutsche Bank, the largest bank in Germany, has announced that it will no longer provide full access to Russian stocks owned by its clients, as reported by Reuters. The bank has formally informed depositary receipt holders that they may not receive complete ownership of all the shares they are entitled to, according to sources cited in the Reuters report. Investors who continue to hold Russian depositary receipts (DRs) have been advised of this development.

In a communication dated June 9, Deutsche Bank disclosed that it had identified a shortfall in the shares backing the depositary receipts allocated by the bank prior to the Ukraine invasion. (Read More)

Hindustan Aeronautics shares will attract attention in Tuesday’s trading session as the company’s board is set to meet to deliberate on a proposal regarding the division of equity shares and a recommendation for the final dividend. On Monday, Hindustan Aeronautics shares closed 1.65% higher at ₹3,700.20 per share on the BSE.

According to an exchange filing by the company, the board of directors will convene on Tuesday, June 27 to discuss various matters, including the proposal for the division of equity shares and the board’s recommendation for the final dividend for the fiscal year 2022–2023. (Read More)

On Monday, City Union Bank announced its intention to raise ₹500 crore through the Qualified Institutional Placement (QIP) route in order to support its business expansion. The board of directors, during a meeting, approved the capital raise through the QIP route amounting to ₹500 crore, as stated in a regulatory filing by City Union Bank.

The private sector bank also mentioned that the approval of shareholders would be sought during the annual general meeting for the proposed capital raise.

ideaForge Technology Limited’s initial public offer (IPO) commenced on 26th June 2023 and will be open for bidding until 29th June 2023, which is Thursday of this week. The drone manufacturing company has set the price band for the ideaForge IPO at ₹638 to ₹672 per equity share. Interestingly, ideaForge Technology Ltd shares have already made their debut in the grey market. Market observers have noted that ideaForge shares are being traded in the grey market at a premium of ₹490 per share today. (Read More)

TCS appoints new head to oversee hiring of temporary workers amid internal probe; L&T secures “significant” orders for power transmission and distribution business; ICICI Prudential receives show cause cum demand notice from Directorate General of GST Intelligence; Zee Entertainment’s plea challenging Sebi order posted for hearing on Tuesday; SBI Capital Markets expands operations to Middle East with new Abu Dhabi office; Bharti Airtel restructures Airtel Business with CEO Ajay Chitkara stepping down; PTC India Financial Services appoints Mahendra Lodha as CFO; Lupin considers demerging API business; City Union Bank to raise ₹500 crore through QIP; Aditya Birla Capital launches QIP issue. (Read More)

Industry sources have revealed that Lupin, a prominent pharmaceutical company, is considering a restructuring plan to unlock value by separating its API (active pharmaceutical ingredients) business. This strategic move follows the footsteps of Glenmark Pharma, another pharmaceutical player that successfully spun off its API business into a separate entity named Glenmark Life Sciences in May 2019. Glenmark Life Sciences made its market debut in August 2021. Lupin’s stock has shown significant growth, rising by over 24 percent in the past three months.

The recent surge in Lupin’s trading can be attributed to the US FDA’s approval of their key respiratory drug, gSpiriva. With the API business showing signs of recovery, Lupin is now considering an internal restructuring initiative. The company aims to separate its API division in order to unlock its potential value. (Read More)

Bharti Airtel has initiated a restructuring process for its enterprise business division, Airtel Business, which will involve the departure of Chief Executive Officer Ajay Chitkara from his role, effective from 20 August.

Under the restructuring, Airtel Business will be divided into three distinct categories, each headed by a designated leader. Vani Venkatesh will assume responsibility for the global business segment, Ganesh Lakshminarayanan will oversee the domestic business segment, and Ashish Arora will lead Nxtra Data Centers.

The telecom operator, headquartered in New Delhi, made the announcement regarding these changes after the market closed on Monday. (Read More)

According to informed sources, SBI Capital Markets, the investment banking and project advisory division of State Bank of India (SBI), has extended its reach to the Middle East by opening a new office in Abu Dhabi. The establishment of a branch office at the Abu Dhabi Global Market (ADGM), an international financial center, has recently been granted approval to SBI Caps. Although an official announcement is pending, executives from SBI and SBI Caps are scheduled to inaugurate the branch on 3 July, as per a documented itinerary reviewed by Mint. (Read More)

The Securities Appellate Tribunal (SAT) on Monday refused to take on record an additional affidavit filed by the Securities and Exchange Board of India (Sebi) in a matter pertaining to the alleged diversion of funds by Punit Goenka and Subhash Chandra of Zee Entertainment Enterprises Ltd.

The tribunal, while hearing a plea filed by Goenka and Chandra challenging Sebi’s 12 June order that restrained them from holding any key position in any listed entity, posted the matter for hearing on Tuesday.

The bench led by Justice Tarun Agarwala said, “Considering the objections raised, we are of the opinion that the additional affidavit which has been filed during the course of the hearing will not be taken into consideration while passing the final orders.” (Read More)

On Monday, ICICI Prudential Life received a notice from the Directorate General of GST Intelligence (DGGI) regarding the non-payment of taxes amounting to Rs. 492.06 crore for a period of five years, spanning from July 2017 to July 2022.

The company disclosed in an official filing that it has been served a show cause cum demand notice (SCN) by the DGGI. The notice requests the company to provide a valid reason as to why a tax amount of Rs. 492,06,48,296/- (Rupees Four Hundred Ninety Two Crores Six Lakhs Forty Eight Thousand Two Hundred Ninety Six only) pertaining to the mentioned period should not be levied against the company. (Read More)

Tata Consultancy Services (TCS) Ltd has appointed a new leader to manage the recruitment of temporary employees in light of an ongoing internal investigation into a scandal involving bribery for jobs. This scandal has resulted in the termination of at least 15 executives and the banning of eight staffing firms.

Sivakumar Viswanathan, with nearly three decades of experience, has been entrusted with the role of heading the Resource Management Group (RMG) at TCS. This group is responsible for overseeing the hiring of contractual workers and deploying internal personnel to various projects. (Read More)

Wall Street lost ground on Monday and crude prices advanced as investors digested the aborted Russian mutiny over the weekend and wrestled with lingering concerns over the path of Federal Reserve monetary policy.

All three major U.S. stock indexes ended red, with megacap momentum stocks pulling the tech-heavy Nasdaq to the sharpest decline, down 1.16%.

The blue-chip Dow closed only slightly lower, its losses held in check by consumer discretionary and industrials.

Economically sensitive real estate, transports, materials and smallcaps all outperformed the broader market.

U.S. data on tap this week includes new orders for durable goods, housing data, the Commerce Department’s final take on first-quarter GDP, consumer surveys from The Conference Board and University of Michigan and Friday’s Personal Consumption Expenditures (PCE) report, which covers consumer income/outlays, and crucially, inflation.

The Dow Jones Industrial Average fell 12.72 points, or 0.04%, to 33,714.71, the S&P 500 lost 19.51 points, or 0.45%, to 4,328.82 and the Nasdaq Composite dropped 156.74 points, or 1.16%, to 13,335.78. (Reuters)