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Firm Finish to the Week
Fri, 16 Sep Closing

After opening the trading session on a strong note, the Indian markets shed some of the early gains in the final few hours of trade. At the closing bell, the BSE Sensex stood higher by 186 points, while the NSE Nifty finished up by 37 points. The S&P BSE Mid Cap finished down by 0.3%, while the S&P BSE Small Cap finished up by 0.2%. Gains were largely seen in FMCG and IT stocks.

Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.7% and the Hang Seng rose 0.63%. The Shanghai Composite lost 0.68%. European markets are trading mixed as well. The FTSE 100 is up 1.17%, while the DAX gains 0.3%. The CAC 40 is off 0.26%.

The rupee was trading weak at 66.88 against the US$ in the afternoon session. Oil prices were trading at US$ 43.38 at the time of writing.

Shares of Indian Oil Corporation (IOC) finished on an encouraging note (up 1.3%) after it was reported that the company will invest Rs 1.8 trillion in the next 6-7 years to ramp up capacities in refineries and gas pipeline.

In the current year, IOC will invest close to Rs 150 billion on various projects under implementation. But in the next three years, it expects to invest close to Rs 720 billion. The capex will include significant capacity additions of 24 million tonnes through brown-field expansions and quality up gradation in its refineries.

The company's inventories had helped in improving gross refining margins (GRM) to US$9.9 per barrel in Q1, which may not be sustained during the rest of the year. However, the Paradip refinery will help the Navaratna company to improve the GRM in coming quarters.

IOC is seeking to improve the fuel quality to make it BS VI (BS six) compliant from BS IV by April 2020. To ramp up the additional pipeline capacity, the company will add nearly 6,000-7,000 km of pipelines by 2021.

The company also recently increased petrol prices by 58 paise per liter, while it has reduced diesel prices by 31 paise per liter. The current level of international product prices of petrol & diesel and INR-USD exchange rate warrant increase in selling price of petrol and decrease in selling prices of diesel, the impact of which is being passed on to the consumers with this price revision.

Despite the cooling off of fuel demand globally, the International Energy Agency has consistently projected that the demand for fuel from India is poised to grow. In order to tackle the growing demand, IOC plans to ramp up its capacity to over 100 million tonnes by 2021 from 80.5 million tonnes currently.

Oil & Gas stocks were in demand today with BPCL and Gujarat Gas Ltd leading the gains.

In another development, ICICI Prudential Life Insurance aims to raise Rs 60 billion through the initial public offer (IPO) (Subscription Required). According to an article in The Moneycontrol, the company's initial share sale, which will open on September 19 and close on September 21, involves an offer of up to 18,13,41,058 equity shares of a face value of Rs 10 each by its shareholders including the promoter ICICI Bank through an offer for sale.

IPO constitutes 12.63% of the post-offer paid-up equity share capital of the company. The net offer will constitute 11.37% of the post-offer, paid-up equity share capital of the company. It is the country's first insurer to launch a public offer.

ICICI Bank has been maintaining the stance that over a medium and a long term strategy. The bank will be divesting some part of its holding in major subsidiary companies. The company rushed with the IPO plan soon after Parliament amended the IRDA Act to hike the FDI limit in the insurance sector and the IRDAI came up with the IPO guidelines.

As per the reports, in the 2015-16 fiscal, ICICI Pru Life's total premium stood at Rs 191.64 billion. Its persistency ratio was 82.4%, the highest in the sector, while asset under management (AUM) was at Rs 1.09 trillion. The total expenses of the entity are one of the lowest at 14.6%. The overall market share of the company was 11.3% on retail weighted received premium last fiscal.

Our recent edition of The 5 Minute WrapUp offers two ways to think about IPOs and explains how to profit from them.

Further, to help you approach the big IPOs as an enterprising investor would, we are preparing special handbook for IPO Investing. Watch this space to know how you could access it...

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Nov 24, 2017 (Close)