Street signs: Defence stocks may rise, Mankind Pharma IPO, and more

Higher capital outlay ammo to fire up defence stocks
 

The shares of Bharat Electronics (BEL) and Bharat Dynamics (BDL) are likely to rise in the next two financial years as capital outlay on the Army and Navy is likely to pick up through 2024-25 (FY25). According to analysts, the allocation for the Army might go up to Rs 500-700 billion in FY25. The capital outlay on the Navy until FY25 is likely to be Rs 923 billion. “Based on recent contracts awarded by the Ministry of Defence and the existing pipeline, we believe BEL is likely to be the primary beneficiary as its healthy order book will complement execution across the three services. Besides, we see opportunities for BDL as the government’s focus on missile systems will directly benefit the company,” observe analysts.

Reversal of fortune ahead for equity savings scheme

After having recorded seven straight months of outflows, equity savings schemes are expected to witness a change of fortune in the months ahead. They are likely to gain some traction after debt schemes lost the benefits of indexation. These schemes are lower-risk investment options but enjoy equity taxation. They maintain a minimum of 65 per cent allocation in equity and arbitrage and the rest in debt. Data from Value Research shows that equity savings schemes have delivered 13 per cent annualised returns in the past three years. There are 22 schemes in the category that collectively manage close to Rs 17,000 crore (as of end-March).

Mankind Pharma IPO a promising prescription

The grey market premium for the initial public offering (IPO) of Mankind Pharma, known for its at-home pregnancy testing kits, is less than 10 per cent apiece. The IPO will open on April 25 and close on April 27. The shares are likely to get listed on May 9 on both the National Stock Exchange and the BSE. “The recent volatility in the market has weighed on sentiment. Also, we are seeing such a big issue after many months,” says a primary market expert. Mankind Pharma has an issue size of Rs 4,326 crore and is the biggest IPO since Delhivery which hit the markets last May.