Sensex Ends 207 Points Lower as Metal & Banking Stocks Witness Selling; Axis Bank Tanks 7%
Closing

WPI Inflation Data, Passenger Vehicle Sales, and Buzzing Stocks Today

Indian share markets witnessed volatile trading activity during closing hours today and ended lower.

After trading in a range throughout the session, benchmark indices slipped into red during closing hours as select financial and banking stocks extended losses.

At the closing bell, the BSE Sensex stood lower by 207 points (down 0.3%).

Meanwhile, the NSE Nifty closed lower by 57 points (down 0.3%).

Asian Paints and UPL were among the top gainers today.

Axis Bank and Bajaj Finance, on the other hand, were among the top losers today.

The SGX Nifty was trading at 18,250, down by 64 points, at the time of writing.

The BSE Mid Cap index ended on a flat note, while the BSE Small Cap index ended up by 0.3%.

Sectoral indices ended on a negative note with stocks in the metal sector, banking sector and energy sector witnessing most of the selling pressure.

IT stocks, on the other hand, witnessed buying interest.

Shares of SBI and TCI Express hit their respective 52-week highs today.

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Asian stock markets ended on a negative note today.

The Hang Seng and the Shanghai Composite ended down by 1.6% and 1%, respectively. The Nikkei ended on a flat note in today's session.

US stock futures are trading on a flat note today with the Dow Futures trading down by 29 points.

The rupee is trading at 75.02 against the US$.

Gold prices for the latest contract on MCX are trading down by 0.2% at Rs 47,729 per 10 grams.

Speaking of stock markets, Brijesh Bhatia shares his short-term view on the Nifty, in his latest video for Fast Profits Daily.

Brijesh believes, despite the recent bearishness in the market, the Nifty is still in a bullish trend. In other words, the bulls are still in control of the Nifty.

Tune in to the video below to find out more:

In news from the real estate sector, IRB Infra was among the top buzzing stocks today.

Shares of IRB Infrastructure Developers (IRB Infra) were locked at the 10% lower circuit at Rs 265 on the BSE today after the company's board approved fund raising of up to Rs 53.5 bn by issuing 252.5 m equity shares through preferential issue on a private placement basis.

The issue price for the preferential allotments is Rs 211.8 per share, a 21% discount to today's closing price of Rs 265 on the BSE.

IRB Infra has announced two separate equity fundraise through preferential allotments to Cintra, an arm of Spanish infrastructure major Ferrovial and Singapore's GIC.

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According to the deal details, Cintra would invest equity capital of up to Rs 31.8 bn and will have a maximum stake of 24.9% in IRB post investment.

On the other hand, GIC (through its affiliate) would invest equity capital of up to Rs 21.7 bn into IRB for a maximum stake of up to 16.9% in IRB post investment.

The total investment proceeds from these investments will be a maximum of Rs 53.5 bn, making it the biggest equity fundraise by a listed Indian road firm.

The proceeds are likely to be utilised for deleveraging of the corporate level debt of Rs 32.5 bn, growth capital for current and future opportunities (Rs 15 bn) and general corporate purposes (Rs 6 bn).

Virendra D Mhaiskar, the founder promoter of IRB will continue as the promoter and single largest shareholder post completion of the transactions with an approximate 34% stake and will retain management control of IRB.

This equity fundraise will help achieve the twin objectives of deleveraging and access to growth capital to participate in the massive infrastructure development and monetization plan of the government of India.

IRB Infra share price ended the day down by 10% on the BSE.

To know more, check out IRB Infra's 2020-21 annual report analysis.

Speaking of the current stock market scenario, note that the BSE smallcap index has surged more than 180% since the crash in March 2020.

Despite the index being up more than 1.8 times, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes smallcap stocks are set for a massive up move in 2021 and beyond.

Here's why...

The Smallcap to Sensex ratio, a metric referred to get a sense of relative valuations, currently stands at 0.48 times. To be sure, this is higher than a median of 0.43 times.

And yet, it's the lowest of all the peaks in the smallcaps so far. In the last cycle which peaked in January 2018, when the ratio touched 0.49, the peak was still 9 months away.

Here's what Richa wrote in one of the editions of Profit Hunter...

  • When it comes to buying smallcap stocks, especially at this point in the rebound rally, you will need a bottom up approach, and a long term horizon.

    In fact, if you don't have the stomach to withstand a 20%-30% kind of corrections and volatility, this space may not be for you at all. And you should stop reading right here.

As per Richa, smallcaps are a great opportunity to make some big returns. But you need to stay disciplined when it comes to allocating money. And you need to be sharp when picking the right stocks.

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Moving on to news from the IPO space...

Paytm Hikes Issue Size to Rs 183 bn

With weeks to go for its initial public offering (IPO), Paytm has hiked its issue size to Rs 183 bn from the originally planned Rs 166 bn.

The increased portion will all come in the offer-for-sale (OFS) component with existing shareholders selling more of their shares.

The size of the primary offering will remain unchanged at Rs 83 bn, while the secondary sale size will now be Rs 100 bn.

The biggest IPO in the history of Indian capital markets so far has been that of Coal India (CIL), which raised Rs 154.8 bn in 2010.

The Paytm issue which is expected to hit the market next month, will see the shares of One 97 Communications (Paytm's parent company) being listed both on the BSE and the NSE

Even before the increase in size, Paytm's offering was the largest in India.

According to sources, Paytm has decided to hike the issue size after receiving feedback that there is enough of an appetite for the company's shares at the right price.

Nearly half of the offer for sale is by Ant Financial and the remaining by Alibaba, Elevation Capital, SoftBank and other existing shareholders.

Investment bankers are understood to have advised the company to offer the shares in a price band to enable price discovery.

How this IPO sails through remains to be seen.

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


Sensex Trades in Green, Nifty Holds 18,250; Asian Paints and Sun Pharma Top Gainers
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Sensex Trades in Green, Nifty Holds 18,250; Asian Paints and Sun Pharma Top Gainers

Asian share markets are trading lower today amid profit-taking after sharp rallies in the previous session, as investors closely watched this week's corporate earnings.

The Nikkei declined 0.5% while the Shanghai Composite fell 0.9%. The Hang Seng plunged 1.6%.

In US stock markets, Wall Street indices closed modestly higher on Tuesday, with the Dow and S&P 500 hitting fresh records.

Both, the Dow Jones and Nasdaq Composite added 0.1%.

Back home, Indian share markets have opened in green, defying global mood.

Bajaj Auto, IndusInd Bank, ITC, Larsen & Toubro, Maruti Suzuki and SBI Life will report their earnings today.

The BSE Sensex is trading up by 81 points. Meanwhile, the NSE Nifty is trading higher by 22 points.

Asian Paints is among the top gainers today. Axis Bank and Bajaj Finance, on the other hand, are among the top losers today.

The BSE Mid Cap index is up 0.5%. The BSE Small Cap index is trading higher by 0.7%.

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Barring automobile, all sectoral indices are trading in green with stocks in the healthcare sector and capital goods sector witnessing most of the buying.

Shares of TCI Express and SBI hit their 52-week high today.

The rupee is trading at 75.01 against the US$.

Crude oil prices fell today after industry data showed crude oil stockpiles rose more than expected and fuel inventories unexpectedly increased last week in the United States.

Gold prices are trading down by 0.1% at Rs 47,775 per 10 grams.

In global markets, gold snapped five straight sessions of gains, shedding nearly 1% as the dollar firmed and strong earnings lowered investor appetite for the safe-haven asset.

Spot gold was down 0.9% at US$1,792.4 per ounce.

Speaking of the precious yellow metal, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

The recent price volatility in the bullion market has rattled many traders. Even with the recent volatility in prices, gold remains among the best performing commodities this year to combat the fallout from the coronavirus pandemic.

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In news from the banking sector, Axis Bank shares will be in focus today.

Private lender Axis Bank on Tuesday posted an 86% year-on-year (YoY) jump in its net profit to post its highest quarterly profit of Rs 31.3 bn for the second quarter ended September 2021.

In the same period a year ago, the bank had posted a net profit of Rs 16.8 bn.

Street was expecting the lender to post a profit of Rs 29.1 bn for the quarter under review.

Axis Bank's operating profit for the quarter was Rs 59.3 bn while the core operating profit was Rs 54.6 bn.

The bank's net interest income (NII) grew 8% YoY to Rs 79 bn from Rs 73.3 bn in September 2020.

Fee income for the quarter grew 17% YoY and 21% sequentially to Rs 32.3 bn. Retail fees grew 19% and constituted 63% of the bank's total fee income.

Specific loan loss provisions for the quarter under review were Rs 9.3 bn compared to Rs 28.7 bn in June 2021.

The bank has not utilised Covid-19 provisions during the quarter. It holds cumulative provisions of Rs 129.5 bn at the end of September 2021.

Gross slippages for the said quarter came in at Rs 54.6 bn, lower than Rs 65.2 bn in the June 2021 quarter but higher than Rs 17.5 bn in the same quarter last year.

In a regulatory filing, the private lender said,

  • Slippages in Q2FY21 moderated due to regulatory forbearances that do not exist in the current quarter. Recoveries and upgrades from NPAs during the quarter were Rs 47.6 bn while write-offs were Rs 25.1 bn.

Axis Bank share price is currently trading lower by 3.9%.

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Speaking of stock markets, Brijesh Bhatia explains the link between the dollar and the Nifty, in his latest video for Fast Profits Daily.

As per Brijesh, this relationship can tell us in advance how the Nifty could move.

Tune in to the below video to find out more:

Moving on to news from the IPO space, the initial public offer (IPO) of PB Fintech, the operator of online insurance aggregator Policybazaar, will open on 1 November.

The IPO will close on 3 November and the date for finalisation of basis of allotment with the stock exchange has been stated as 10 November.

The company has fixed the price band at Rs 940-980 per share.

The issue size is 6,07,30,265 shares, with a face value of Rs 2 each.

Through this issue, PB Fintech will raise an amount of around Rs 57.1 bn.

The IPO comprises a fresh issue of Rs 37.5 bn, along with an offer for sale (OFS) of Rs 19.6 bn by existing promoters and shareholders.

Last week, the markets regulator had given the go ahead to PB Fintech to float its maiden public issue.

As of March 2021, over 48 m consumers have registered on Policybazaar platform and purchased over 19 m policies from insurer partners.

In fiscal 2021, the annual number of visits on Policybazaar website was 126.5 m.

How this IPO sails through remains to be seen.

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


SGX Nifty Down 41 Points, BPCL Privatisation Hits Roadblock, Zee Entertainment's Board Meeting, and Buzzing Stocks Today
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BPCL Privatisation Hits Roadblock, Zee Entertainments Board Meeting, and Buzzing Stocks Today

Indian share markets ended on a strong note yesterday as broader markets gained momentum.

At the closing bell yesterday, the BSE Sensex stood higher by 383 points (up 0.6%).

Meanwhile, the NSE Nifty closed higher by 143 points (up 0.8%).

Tata Motors and Tata Steel were among the top gainers.

IndusInd Bank and ICICI Bank, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 1.8% and 2.2%, respectively.

Sectoral indices ended on a positive note with stocks in the realty sector, metal sector and consumer durables sector witnessing buying interest.

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Shares of TCI Express and Jindal Stainless hit their respective 52-week highs.

At 8:00 am today, the SGX Nifty was trading down by 41 points, or 0.2% lower at 18,293 levels. Indian share markets are headed for a negative opening today following the negative trend on SGX Nifty.

Gold prices for the latest contract on MCX were trading down by 0.3% at Rs 48,078 per 10 grams at the time of closing stock market hours yesterday.

Speaking of the stock markets, Brijesh Bhatia, Research Analyst at Fast Profits Report talks about why the dollar is signalling a bullishness on the Nifty and how it could play out in the short term, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

Top Stocks in Focus Today

Among the buzzing stocks today will be Kotak Mahindra Bank.

Private lender Kotak Mahindra Bank reported a 7% fall in its quarter two standalone net profit at Rs 20.3 bn compared to Rs 21.8 bn in the year-ago quarter.

Shares of Kotak Bank surged nearly 3% at Rs 2,217 apiece on the BSE in Tuesday's deals after the earnings announcement.

The bank's net interest income (NII), the difference between interest earned and interest expended, rose over 3% to Rs 40.2 bn from Rs 39 bn in the same quarter last year.

The private lender's provisions and contingencies declined to Rs 4.2 bn from Rs 7 bn quarter on quarter (QoQ), though rose from Rs 3.3 bn year on year (YoY).

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Kotak Mahindra Bank's gross non-performing assets (NPA) during the second quarter stood at 3.2% compared to 3.4% in the June quarter, however, it was higher than 2.7% in the year ago quarter.

Meanwhile, the net NPA improved to 1.06% versus 1.28% on a sequential basis, and remained flat on the YoY basis.

The lender's tax expenses for the quarter ended September declined to Rs 6.6 bn from Rs 7.4 bn in the same quarter of the previous fiscal.

On the other hand, its capital adequacy ratio (Basel III) stood at 21.8% from 23.1% QoQ and 22.1% YoY.

BPCL share price will also be in focus today.

India's plan to privatise Bharat Petroleum Corp (BPCL) has hit a roadblock, with bidders struggling to find partners and spread their financial risks.

The three suitors - Vedanta group, Apollo Global Management and I Squared Capital are talking to global energy giants and sovereign and pension funds, but haven't been able to finalize partners.

Reportedly, some bidders are finding it difficult to invest due to sustainability rules that make it tougher for them to buy a stake in an oil refiner.

This fresh hurdle to sell government's entire stake could temper some of the euphoria generated by the recent sale of Air India to the Tata group and slow down the nation's biggest privatisation drive.

The sale BPCL would have fetched about US$13 bn for the exchequer and other shareholders.

A global push toward green energy and pressure from investors to slash emissions is holding back companies from making large investments in fossil fuels.

For BPCL, the bidders have been slow in conducting due diligence as they wait for new partners to join. That will likely upend the federal government's aim to complete selling its entire 53% holding in BPCL by the end of this financial year in March.

The government had planned to seek financial bids for this sale next month.

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Zee Cancels Board Meeting

Zee Entertainment, which is caught in a legal tussle with its largest shareholders Invesco and OFI Global, has cancelled its board meeting scheduled for 27 October 2021 to consider financial results of the second quarter.

The meeting was cancelled due to lack of quorum and a new date would be announced in a fresh notice, the company told exchanges on 25 October 2021.

In a statement the company said,

  • The trading window for dealing in securities of the company which stands closed from 1 October 2021, in pursuance of company's insider trading code, shall remain closed till 48 hours after the announcement of un-audited financial results of the company for the second quarter and half year ended 30 September 2021.

Zee and Invesco and OFI Global, which together hold a 17.88% stake in the company, are embroiled in a legal battle. Invesco has requisitioned to call an extraordinary general meeting (EGM) for the ouster of MD and CEO Punit Goenka and the appointment of six new independent directors. Zee has said the demand for an EGM is illegal and invalid.

The Zee-Invesco matter is being heard by the Bombay high court as well as the national company law tribunal (NCLT).

HDFC, India Post Payments Bank Tie Up to Offer Home Loans

India Post Payments Bank (IPPB) has tied up with HDFC, India's premier housing finance company, to offer home loans to nearly 47 m customers of IPPB.

Leveraging its countrywide network of 650 branches and over 1.4 lakh banking access points (post offices), IPPB aims to make HDFC's home loan products and its expertise available to its customers across India.

According to the HDFC,

  • The partnership aims to facilitate HDFC home loans to customers, especially in unbanked and underserved areas with many of them having little or no access to finance, to fulfil their dream of owning a home.

IPPB will offer housing loans through nearly 1.9 lakh banking service providers (postmen and gramin dak sevaks).

As per the MoU, credit, technical and legal appraisals, processing and disbursement for all home loans will be handled by HDFC while IPPB will be responsible for sourcing of loans.

HDFC has initiated a number of digital and online initiatives to reach out to homebuyers during the pandemic. Over 88% of new home loan applications are received through digital channels.

We will keep you posted on more updates from this space. Stay tuned.

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