FPI Investments in June Quarter, Telecom AGR Dues Case Hearing, and Top Buzzing Stocks Today

Mon, 24 Aug Pre-Open

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Indian share markets ended their session on a positive note on Friday.

At the closing bell on Friday, the BSE Sensex stood higher by 214 points. Meanwhile, the NSE Nifty stood higher by 59 points.

NTPC and Asian Paints were among the top gainers.

The BSE Mid Cap index ended up by 0.6%. The BSE Small Cap index ended up by 1.4%.

Sectoral indices ended on a positive note with stocks in the banking sector and power sector witnessing buying interest.

Gold prices witnessed selling pressure last week and were trading down by 0.5% at Rs 51,900 per 10 grams at closing market hours on Friday.

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Top Stocks in Focus Today

Indian Overseas Bank will be among the top buzzing stocks after the bank reported a standalone net profit of Rs 1.2 billion for the June quarter of FY21 as provisions declined and other income rose. The bank's net interest income grew 9.6% year-on-year (YoY) to Rs 14.1 billion for the quarter ended 30 June over Rs 12.9 billion in the same quarter last year.

The bank's other income rose 39.1% YoY during the quarter under review. Its total provisions fell 16.3% during the June quarter. Indian Overseas Bank's asset quality improved in the June quarter with gross bad loan ratio percentage of bad loans to total advances falling 863 basis points (bps) YoY to 13.9%. Its net non-performing asset (NPA) ratio was down 594 bps on a YoY basis to 5.1% in Q1FY21.

Divi's Laboratories and SBI Life Insurance will also be in focus today as the NSE Indices, a subsidiary of the National Stock Exchange (NSE) announced that both the stocks will enter the benchmark index Nifty50 from September 25, 2020. On the other hand, Zee Entertainment Enterprises (ZEEL) and Bharti Infratel will be dropped from the Nifty50 index, NSE Indices said in a statement.

Foreign Investors Pump US$ 4 Billion in Indian Equities in June Quarter

After pulling out massive funds in March quarter, foreign investors pumped in nearly US$ 4 billion in Indian equities in the three months ended June. The foreign fund inflows were seen on the back of attractive valuations, lifting of lockdown curbs and the government's efforts to kickstart economic activity.

Besides, foreign portfolio investors' (FPIs) assets in Indian equities too surged after a sharp fall in the previous quarter. The value of their investments in Indian stocks climbed significantly during the quarter ended June 2020.

As of the quarter ended June, the value of FPI investments in Indian equities stood at around US$ 344 billion, which was considerably higher than the US$ 281 billion registered in the preceding quarter and meant a spike of 23%.

In other similar news, June quarter of FY21 saw foreign institutional investors' (FIIs) holdings in Nifty500 companies at a near 5-year low.

As per a report by leading brokerage firm, even though the FII holdings increased marginally in Q1 by 8 bps quarter-on-quarter (QoQ), it declined 130 bps year-on-year (YoY) to 20.8%.

FIIs reduced ownership by 68% in Nifty 500 and 74% in Nifty50 companies QoQ.

Insurance, consumer, oil & gas were among the sector that saw FIIs increase stake in them while PSU banks, NBFCs, telecom, technology were among the sectors in which FIIs reduced stake.

How this trend pans out in the coming quarters remains to be seen. Meanwhile, we will keep you updated on all the developments from this space. Stay tuned.

Supreme Court AGR Dues Case Hearing

Stocks from the telecom sector will be in focus today as the Supreme Court last week adjourned the hearing on the issue of adjusted gross revenue (AGR) dues from telecom companies to today (August 24, Monday). During Friday's hearing, the main point of the arguments centered around the spectrum as an asset for the telecom companies, its sale and related rights.

The Supreme Court last week expressed concern over how statutory adjusted gross revenue (AGR) dues of bankrupt telecom companies would be recovered if their spectrum were transferred during the insolvency resolution process.

The court asked the telecom department who would pay the AGR dues of ailing telcos Reliance Communications, Aircel and Videocon, which are resolving cases under the Insolvency and Bankruptcy Code.

A three-judge bench led by Justice Arun Mishra asked solicitor general Tushar Mehta to provide this information and submit details of the spectrum held by these companies since 1999.

"We are extremely worried that all AGR dues will be wiped out in the IBC process. After the spectrum sale, the new user will deny pending demands against the spectrum," he observed.

The bench is examining claims that telcos facing insolvency proceedings were in no position to pay their AGR dues, estimated at over Rs 400 billion.

The bench asked the Department of Telecommunications (DoT) if the AGR dues of Videocon and Aircel could be fixed on Bharti Airtel, which had traded spectrum with both.

Bharti Airtel, through senior advocate Kapil Sibal, insisted that Airtel had already paid most of its AGR dues and was not party to any resolution process.

The ailing telcos have urged the court to treat them as a separate class because they were in no position to pay.

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

And 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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