Sensex Rallies 548 Points; Oil & Gas and Banking Stocks Witness Huge Buying

Fri, 17 Jul Closing

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Indian share markets continued their momentum and ended on a strong note today.

Benchmark indices ended higher for the third consecutive day today helped by gains seen in index heavyweight Reliance Industries and oil & gas stocks.

At the closing bell, the BSE Sensex stood higher by 548 points (up 1.5%).

The NSE Nifty closed higher by 162 points (up 1.5%).

The SGX Nifty was trading at 10,916, up by 202 points, at the time of writing.

The BSE Mid Cap index ended up by 1.7%.

The BSE Small Cap index ended up by 1.2%.

On the sectoral front, gains were largely seen in the oil & gas sector and banking sector.

IT stocks, on the other hand, witnessed selling pressure.

Asian stock markets ended on a positive note today. As of the most recent closing prices, the Hang Seng ended up by 0.5% and the Shanghai Composite stood higher by 0.1%. The Nikkei ended down by 0.3%.

Overnight, US stocks ended lower amid rising coronavirus cases and unemployment claims.

European markets were steady at open, with all eyes on an EU summit to agree a post-virus economic rescue plan.

The rupee was trading at 75.02 against the US$.

Gold prices are trading down by 0.1% at Rs 48,772.

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Moving on, Britannia Industries was among the top buzzing stocks today. The company today posted a strong set of numbers for the first quarter of the fiscal year 2020-21 (Q1FY21).

The company's consolidated net profit jumped 118% year-on-year (YoY) to Rs 5,426.8 million as against Rs 2,486.4 million in the year-ago period. Sequentially, the numbers grew 45.7%.

Britannia's total revenue came in at Rs 34.2 billion, up 26.7% against Rs 27 billion in the corresponding quarter of the previous fiscal.

In news from the energy sector, shares of Bharat Petroleum Corporation (BPCL) rose over 13% today amid reports that global oil giants are showing interest in the state-owned oil marketing company.

As per media reports, Saudi Aramco, Rosneft, Exxon Mobil, Abu Dhabi National Oil Co (ADNOC) and one Indian private player will be participating in the bidding process for BPCL.

The deadline for submitting Expressions of Interest (EoI) has been postponed twice and the current deadline ends on July 31.

The Department of Investment and Public Asset Management (DIPAM) in March had released the Preliminary Information Memorandum (PIM) for inviting EoI for the strategic disinvestment of BPCL, along with transfer of management control.

The Government of India has proposed strategic disinvestment of its entire shareholding in BPCL comprising of 1,149 million equity shares, which constitutes 52.98% of BPCL's equity share capital.

The government has barred PSUs from bidding for BPCL and expects private sector Indian players and global MNCs to bid for its stake.

BPCL share price ended the day up by 12.5%.

Moving on, in latest developments from the IPO space, Blackstone-backed Mindspace Business Parks REIT or Real Estate Investment Trust will launch its initial public offering (IPO) in the last week of July to raise about Rs 47 billion.

Blackstone and K Raheja Corp will offload units worth Rs 37 billion crore and the REIT will sell fresh units of about Rs 10 billion in the issue.

The company has reported a 21% jump in revenues at Rs 20.3 billion in FY20 over FY19. Profit for the year ended March 31, 2020 was flat at 5.1 billion.

Mindspace would be the second REIT to list on Indian bourses. Last year in March, Embassy Office Parks REIT got listed on the exchanges.

Retail investors can apply to REIT units but with a minimum trading lot size of 50,000.

Unlike equity investments, REITs provide assured returns to investors through compulsory dividend distribution. REITs must mandatorily distribute 90% of the net distributable income as dividend.

In other news, the Rs 150-billion follow-on public offer (FPO) by Yes Bank was subscribed 70.6% on Day 3 of the bidding process so far.

At the time of closing hours today, the issue, which will conclude later in the day, attracted bids for 7,638 million shares, which was 70.6% the issue size of 9,099.7 million shares.

The maximum bids were received at lower end of price band of Rs 12-13 per share. In fact, the anchor book, through which the lender had received Rs 41 billion, was also subscribed at Rs 12 per share.

The reserved portion of non-institutional investors has seen subscription of 34.76% and that of retail 35.89% and employees 23.43%, while the portion set aside for qualified institutional buyers was subscribed 1.54 times.

Note that the IPO markets have dried up. The IPO by Rossari Biotech is one of only two IPOs this calendar year with the other being SBI Cards and Payment Services.

IPOs by MSMEs have also dried up with only 17 IPOs in the year so far, raising a total of Rs 1.2 billion compared to 51 IPOs raising Rs 6.7 billion last year.

At a time when companies are looking for avenues to raise funds in order to sustain this period of stress, there is ample liquidity, strong FPI inflows and record number of retail investor entering the market.

The Rs 5-billion IPO of speciality chemicals maker Rossari Biotech received massive investor interest, resulting in the IPO getting subscribed 79.37 times.

Speaking of IPOs, in one of the editions of The 5 Minute WrapUp, Ankit Shah has shared how IPOs offer insights into the mood of the stock markets.

He picked the six most successful IPOs of 2019 and checked the retail investor enthusiasm for them.

Obviously, all these IPOs were oversubscribed across investor categories. But the level of retail investor enthusiasm differed widely, depending on the overall market sentiments.

This can be seen in the chart below:

Are Retail Investors Back in the IPO Game?

Here's what Ankit wrote about it...

• Clearly, IRCTC witnessed the highest number of bids for the retail category. Factoring in the discount of Rs 10 per share for the retail category, the total bids were worth a whopping Rs 3,242 crore. Over five times the entire IPO size!
  
  Polycab India and the recent IPO of CSB Bank also received a strong thumbs-up from retail investors.

Does this hint that retail investors are coming back to the markets? It would be interesting to see how this trend pans out in 2020.

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

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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