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Sensex Opens 200 Points Higher; Lupin & Axis Bank Top Gainers
Tue, 22 Aug 09:30 am

Majority of Asian stock indices are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 0.07%, while the Hang Seng is up 1.06%. The Shanghai Composite is trading up by 0.14%. US stocks rose after two days of declines, though a drop in oil prices weighed on energy shares and tensions between the United States and North Korea kept investors on edge.

Back home, share markets in India have opened the day on a firm note. The BSE Sensex is trading higher by 212 points while the NSE Nifty is trading higher by 71 points. The BSE Mid Cap and BSE Small Cap index opened the day up by 0.7% & 0.6% respectively.

All major sectoral indices have opened the day in the green with metal stocks, realty stocks and PSU stocks leading the pack of gainers. The rupee is trading at 64.03 to the US$.

Lupin share price surged 2.6% in the early trade after it was reported that the company has received an establishment inspection report (EIR) from the US Food and Drug Administration for its Aurangabad facility in Maharashtra. EIR indicates closure of inspection.

Energy stocks opened the day on a mixed note with Gujarat State Petronet and BPCL witnessing maximum buying interest. In the latest development, the board of Oil and Natural Gas Corp (ONGC) on Monday gave 'in-principle' approval to acquire the government's 51.11% stake in Hindustan Petroleum (HPCL).

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Prior to the merger, HPCL is likely to take over Mangalore Refinery and Petrochemicals (MRPL) to bring all the refining assets of ONGC under one unit. ONGC currently owns 71.63% of MRPL while HPCL has a 16.96% stake in it, the reports noted.

Further, the deal is expected to be completed within a year. HPCL will become a subsidiary of ONGC and will remain a listed company post the acquisition.

So, what lies ahead for the merged entity? Richa Agarwal, our oil & gas sector analyst has shared her views in the recent edition of The 5 Minute WrapUp. Here's a snippet of what she wrote:

  • "A fall in the oil prices has dented the profitability of oil exploration companies such as ONGC. The merger with a downstream company will help ONGC de-risk its business. ONGC will also benefit from the huge fuel retail network of HPCL."

Going forward, whether the move will be executed well or will lead to further complexities and integration issues instead of synergies will be the key thing to watch out for.

ONGC share price & HPCL share price opened the day up by 0.7% & 1.2% respectively.

Moving on to the news from IPO space. Apex Frozen Foods, a smaller peer to listed Avanti Feeds is all set to hit Dalal Street today with its initial public offering to raise nearly Rs 1.52 billion by divesting a 28% stake.

The company offers mainly variants of processed white shrimp under brands, namely Bay fresh, Bay Harvest and BayPremium.

Apex Frozen Foods has allotted 24,90,000 shares to anchor investors at Rs 175 per share aggregating to Rs 0.44 billion.

Do the company's fundamentals justify the price it is asking? Should you subscribe to it? Read on to find out (subscription required).

Speaking of IPO space, buoyancy in the markets has given fundraising a boost. Positive sentiments have attracted investors in hordes. And retail investors are active like never before, taking oversubscription to insane levels.

As per The Economic Times, at least fifty more companies are likely to come out with IPOs this year, raising between Rs 400 and Rs 600 billion. To put that in perspective, in 2007-08, 84 companies raised Rs 410 billion via IPOs.

IPO Frenzy Continues

But we don't need thousands of IPOs to get rich. That's not how super investors make their fortunes. But a few good IPOs could certainly become the multibaggers in your portfolio in a few years.

We, at Equitymaster, have always recommended IPOs cautiously. Here's Rahul Shah, co-head of research at Equitymaster, explaining our rationale behind the approach:

  • 'We know what a dirty game the IPO business is. We've seen it over and over again: It's a game where the odds are stacked against investors. So for us, the equation is simple. We'd rather face criticism in the short run than see our subscribers lose money over the longer term. We weren't afraid to do this during the hot IPO days of 2007, and we're not afraid to do it today.'

The Bottomline: You need to evaluate each IPO on its merits by considering its fundamentals, and most importantly, the valuations. And this is particularly important when the hype surrounding IPOs is at its peak.

We have reviewed each of them and have released their recommendation notes. You can check the same on their IPO page.

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

Read the latest Market Commentary


Please Note: The stock price of Yes Bank on NSE-50 is not adjusted for face value split. Kindly refer to its BSE's quote today for the adjusted price.

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S&P BSE OIL & GAS


Sep 22, 2017 03:23 PM

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