Interglobe Aviation QIP, Rising Premium for Non-Life Insurers, and Buzzing Stocks Today

Wed, 12 May Pre-Open

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Indian share markets ended lower yesterday.

Benchmark indices ended nearly 1% lower, tracking weakness in global markets and dragged primarily by finance and banking stocks.

At the closing bell yesterday, the BSE Sensex stood lower by 341 points (down 0.7%).

Meanwhile, the NSE Nifty closed lower by 92 points (down 0.6%).

Coal India and NTPC were among the top gainers.

JSW Steel and Hindalco, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 0.6% and 0.8%, respectively.

Sectoral indices ended on a mixed note with stocks in the banking sector, finance sector and metal sector witnessing most of the selling pressure.

Oil & gas stocks, on the other hand, witnessed buying interest.

Shares of Grindwell Norton and Dalmia Bharat hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading down by 0.1% at Rs 47,882 per 10 grams at the time of closing stock market hours yesterday.

Speaking of stock markets, in his latest video for Fast Profits Daily, Brijesh Bhatia talks about the worst sector in the stock market according to the charts.

The stock market seems to be going up almost every day. Every trader is interested in finding out the best stocks and sectors.

In the video below, Brijesh tells you which sector you should avoid in this market. Tune in to find out more:

Top Stocks in Focus Today

Punjab National Bank (PNB) will be among the top buzzing stocks today.

State-owned PNB launched a so-called qualified institutional placement (QIP) offer to raise as much as Rs 18 billion from institutional investors.

The bank said that its board has approved issuance of shares to investors at a floor price of Rs 35.51 per share in the QIP offering.

As per reports, the base size of the share sale is Rs 12 billion with the option to upsize to Rs 18 billion, depending on the demand.

At the base size the fundraise will result in a dilution of 3.4%, while at the upper end it will be a dilution of 5.1%.

Note that this is the second time the state-owned bank has hit the market to raise funds from institutional investors in the last six months, having raised Rs 37.9 billion in December through a QIP.

The funds raised will be used to grow the bank's loan book.

HSIL share price will also be in focus today as the company reported a multi-fold jump in its net profit for the quarter ended March 2021.

The company's net profit jumped to Rs 330 m in Q4FY21 from Rs 33.8 m in the same period a year ago. Revenue from operations of the company during the quarter also rose 37.4% year-on-year (YoY) to Rs 6.3 bn from Rs 4.6 bn in Q4FY20.

During the quarter, the company delivered an EBITDA (earnings before interest, depreciation and amortisation) of Rs 1 bn, registering a growth of 65.5%YoY. EBITDA margins also improved to 15.9% in Q4FY21 from 13.1% in Q4FY20.

Gross Direct Premium for Non-Life Insurance Companies Rises 22% in April

In news from the insurance sector...

The gross direct premium written by non-life insurance companies rose by over 22% in April this year to Rs 173.1 billion, as per regulatory data.

All the 33 insurance companies in the non-life segment had generated gross written premium of Rs 141.7 billion in the same month of 2020.

Of these, the 25 players which are categorised as general insurers registered nearly 20% increase in their collective gross premium at Rs 159.5 billion in April 2021, as against Rs 133.3 billion in year-ago same period, data from Insurance Regulatory and Development Authority (IRDAI) showed.

The five standalone health insurance providers witnessed more than 43% jump in gross premium at Rs 12.6 billion as against Rs 8.1 billion.

In other news, former Chairman on IRDAI Subhash Chandra Khuntia said that insurers need to focus not only on insuring risks, but also on prevention of risks so that the policyholders derive benefits from not just settlement of claims, but also from prevention of loss.

Khuntia's term as IRDAI chairman ended on May 6. He held the office for three years, from May 2018 to May 2021.

In his final letter to the heads of the insurance companies, uploaded on the website of IRDAI, Khuntia said that despite challenges faced by the economy due to the coronavirus pandemic, the Indian insurance industry had been able to grow at a healthy pace of 9.2% in 2020-21 with the life insurance industry growing at 11.2%.

"Insurance inclusiveness is another area that all of us need to concentrate on so as to cater to the rural population, farmers, women, MSME, the poor, and the marginalised. We need to develop cost-effective microinsurance models for the same," Khuntia said.

In the letter, he also said that Indian insurance sector is presently on the cusp of a transformation.

We will keep you updated on the latest developments from this space. Stay tuned.

Speaking of the insurance sector, Tanushree Banerjee, Co-Head of Research at Equitymaster, recently recommended a high-quality stock from the insurance sector. Subscribers can read the report here (requires subscription).

And if you are not a StockSelect subscriber, here's where you can sign up.

Interglobe Aviation to Raise Rs 30 bn via QIP

InterGlobe Aviation, parent of the country's largest airline IndiGo, on 11 May 2021, said its board has approved raising up to Rs 30 bn through sale of shares to institutional investors.

The fund raising plan of the company comes at a time when the airline industry is facing significant headwinds due to the coronavirus pandemic that has resulted in falling passenger demand and low occupancy in flights.

This will be done through issuance of equity shares by way of a QIP.

The Gurugram-based airline had reported a net loss of Rs 6.2 bn, its fourth consecutive quarterly loss, in the three months ended December 2020. The company is yet to announce its earnings for the March 2021 quarter as well as for the fiscal year 2021.

While the airline industry was slowly on the recovery path, the second wave of the coronavirus pandemic has hit the sector hard.

How this fundraising pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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