Sensex Trades Marginally Higher; Bharti Airtel & Tata Motors Top Gainers

Thu, 4 Jul 12:30 pm | Monish Vora, TM Team

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Share markets in India are presently trading on a positive note after the Economic Survey pegged the FY20 GDP growth at 7%. The survey expects the general fiscal deficit at 5.8% in FY19, as against 6.4% in FY18.

Sectoral indices are trading on a mixed note with stocks in the telecom sector, banking sector and realty sector witnessing maximum buying interest, while consumer durable stocks are trading in red.

The BSE Sensex is trading up by 72 points while the NSE Nifty is trading up by 34 points. The BSE Mid Cap index is trading up by 0.1%, while the BSE Small Cap index is trading up by 0.3%.

The rupee is trading at Rs 68.85 against the US$.

The domestic currency strengthened for ninth consecutive sessions against the US dollar tracking gains in its Asian peers. So far this year, the rupee has risen 1.5% against the greenback.

Asian currencies were trading higher as dollar weakened after a soft private US employment report spurred concern that Friday's jobs data could come in weaker than expected and boost the case for lower interest rates.

To know more about currencies, you can read one of Vijay Bhambwani's recent articles: What Happens When You Mismanage Your Currency

Shares of Indiamart Intermesh made a strong debut today by listing 21% higher at Rs 1,180 against its issue price of Rs 973 apiece on the exchanges.

Post listing, the stock rallied up to 30% to Rs 1,267. A combined 2.5 million shares changed hands on the exchanges.

The company's initial public offer (IPO) had received a strong response with bids for 97 million shares. The IPO was subscribed 36 times.

The qualified institutional buyers (QIBs) category was subscribed 31 times. The non-institutional investor's category was subscribed 62 times. The retail individual investors (RIIs) category was subscribed 14 times.

Indiamart Intermesh is India's largest online business-to-business (B2B) marketplace for business products and services. Indiamart has 60% market share in online B2B classifieds space in India in FY2017, according to a report commissioned by the company.

The objects of the issue were to get the benefits of listing the equity shares on the exchanges and to enhance its visibility and brand image and provide liquidity to its existing shareholders. The proceeds from the offer will be paid to selling shareholders and the company will not receive any such proceeds.

Moving on, Cox & Kings share price is witnessing selling pressure today as the company defaulted on payment of interest on non-convertible debentures (NCDs) which was due on June 30. There were pending sell orders for more than 5 million shares, with no buyers available.

Reports state that the company proposes to meet its financial obligations through a combination of internal accruals and monetization of assets. The company is working towards plans to make good its obligations.

Lenders have turned cautious after Cox & Kings defaulted on commercial paper of Rs 2 billion in the last few days and are looking at ways to address the tour operator's debt issues.

The company has a total debt of Rs 32.4 billion at the end of FY19 which includes short and long-term loans.

The defaults have stumped lenders and stock market as the company had reported of a comfortable liquidity position.

According to a recent note by CARE Ratings, Cox & Kings had reported cash and bank balances of Rs 17.3 billion in June. Of this, it told CARE, that there was about Rs 13 billion, which could be used for debt repayment at any point of time.

It is interesting to note that the stock of Cox & Kings has been a falling knife in the last few years. The stock is down more than 80% in the last 5 years.

Whereas, the stock that we recommended in Smart Money Secrets has been a consistent performer.

Just have a look at the chart below.

Divergence in Stock Performance

As Sarvajeet Bodas writes in a recent edition of The 5 Minute WrapUp...

• No wonder, Cox & Kings share price has lost 87% since 2018 and fallen 78% since the beginning of this year.
  
  Sure, the travel & tourism industry has a great runway for growth ahead.
  
  India is likely to become the third-largest tourism economy in the next 10 years. Not to mention, all the key triggers are in place for this industry to take off.
  
  Rising disposable incomes. A rapidly expanding the middle class. Urbanisation. Easy access to technology. The expansion of budget airlines.
  
  However, to ride this industry tailwinds, your side-car investing journey has to be in the company with a strong track record, ethical management and strong financials.

In Smart Money Secrets, we prefer companies which are run by excellent management, showing prudent capital allocation, businesses which have scalability, and a competitive advantage.

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

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Read the latest Market Commentary

Indian Share Market Update: Top Gainers and Losers