MARKET WRAP: Sensex slips 171 pts amid weak global cues; RIL up over 2.5%

All that happened in the markets today.

2:00 PM

As rates nosedive, NBFCs swarm CP markets to raise ultra-cheap funds

What the banks and other investors are doing instead is investing in short-term commercial papers. Sensing an opportunity to raise cheap funds, companies in the NBFCs sector have moved in, raising three months money at even cheaper than the overnight repo rate of the Reserve Bank of India (RBI). The NBFC sector largely comprises financial institutions, housing finance companies (HFC), NBFCs, and microfinance institutions (MFI). READ MORE

1:47 PM

Sebi tightens grip on board composition at market infra institutions

The regulator already has a strict framework in place dictating the appointments and tenures of board members at stock exchanges, clearing corporations and depositories –termed MIIs in market parlance. However, it appears the regulator opposed reappointment of certain ‘shareholder directors’ due to concerns over their lengthy association. READ MORE

1:35 PM

Expert View :: Jyoti Roy - DVP- Equity Strategist, Angel Broking on RIL-Silver Lake deal

RIL has announced that Silver Lake will invest Rs 7,500 crore in Reliance Retail Ventures Limited (RRVL), the retail arm of Reliance Industries Ltd. (RIL) for a 1.75% equity stake thus valuing the retail business at Rs 4.21 lakh crore. The implied equity value for Reliance retail at Rs 4.21 lakh crore is at the higher end of market expectations and is sentimentally positive for the stock. This investment by Silver Lake comes on the back of the company announcing the acquisition of the Retail, Wholesale, Logistics and Warehousing Business from the Future Group on a slump sale basis for a total consideration of Rs 24,713 crore.

 

We also believe that the acquisition of future retail business by Reliance Industries Ltd. and investment by Silver Lake in RVVL are steps in the right direction. We expect the company to attract further investments in the retail business from other investors which will help consolidate its dominant position in the retail business. We remain positive on Reliance industries Ltd. and expect that the digital and the retail business will be the future growth drivers for the company. Further investments in the retail business and scaling up of Jio Mart business will be key triggers for the company in the near future. Listing of the digital and retail business over the next few years would also lead to significant value unlocking for shareholders in the long run. We continue to maintain our buy rating on reliance Industries with a target of Rs 2,366

1:27 PM

MARKET UPDATE:: Infibeam Avenues is the only stock to have hit its 52-week high on the BSE today

1:21 PM

Nifty Pharma index gains 1% in an otherwise weak market

1:09 PM

Silver Lake's Rs 7,500 cr investment in Reliance Retail sets stage for more

Investors such as Abu Dhabi Investment Authority and Mubadala could be next in line, though a Reliance spokesperson said it could not comment on market speculation.

 

"As a policy we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under SEBI and our agreements with the stock exchanges," the spokesperson said. READ MORE

1:09 PM

Contribution to the S&P BSE Sensex's fall today

12:59 PM

IPO Alert :: Happiest Minds subscribed over 42x till 12:45 pm

Alert: Today is the last day for Happiest Minds' IPO subscription

12:49 PM

IPO Alert :: Route Mobile subscribed 34% till 12:30 pm

12:40 PM

NEWS ALERT | Zydus Cadila gets tentative approval from US FDA to market Empagliflozin & Linagliptin Tablets: Exchange filing

-- The drug is used together with diet and exercise to improve blood sugar control in adults with type 2 diabetes mellitus

12:27 PM

BROKERAGE VIEW:: Axis Securities on Colgate Palmolive (India)

RATING: BUY | TARGET PRICE: Rs 1,565

We initiate coverage on Colgate Palmolive (India) Ltd. (CLGT) with a BUY recommendation and a Target Price of Rs. 1,565, which implies a 15% upside from current levels. We expect CLGT to register revenue/PAT CAGR of 8%/11% over FY20-23E driven by low per capita consumption in India versus other global markets, sustenance of market leadership, strategic focus on growing volume, renewed aggression on deepening distribution in under-penetrated regions, and channels, step up in innovation/new launches, healthy margin profile, and strong balance sheet.

At CMP, the stock trades at fairly attractive valuations of 33x its FY23E EPS (42x – 10-year average PE) thus offering decent scope for upsides given a promising growth outlook from a medium to long term perspective. We value the stock at 38x its FY23E EPS to arrive at our target price.

12:22 PM

BROKERAGE VIEW:: Centrum Broking on JK Lashmi Cement

RATING: SELL | TARGET PRICE: Rs 236

JK Lakshmi Cement (JKLC) 1QFY21 earnings were impacted by pandemic/lockdown as revenues fell 21% to Rs 8.25 bn pulled down by weak realisations and 28% YoY fall in cement volume. We have factored in energy cost savings in our earnings estimates of Rs13.0/18.1 in FY21/FY22. We assign a SELL rating with a target price of Rs 236 based on the replacement cost assigning a discount of ~50% (7x EV/EBITDA (FY22e earnings).

12:20 PM

BROKERAGE VIEW:: ICICI Securities on Info Edge

We like the company due to its prudent capital allocation, a quasi-play on the Indian start up ecosystem and leadership in recruitment with EBITDA margin of above 50%. In addition, Info Edge already has two unicorns in the growing space (Zomato & PolicyBazaar) while its investment in the tech start up space makes it an attractive company. However, a run up in stock price leaves no room for upside in valuation. Hence, we maintain our HOLD rating on the stock and value the stock on an SOTP basis to arrive at a target price of Rs 3,555.

12:20 PM

Financials extend fall; Nifty PSU Bank index slips 8% in a week

Shares of financial service providers were trading lower for the fifth straight day on Wednesday. The Nifty Bank, Nifty PSU Bank, and Nifty Financials indices have fallen over 5 per cent, as compared to 2.5 per cent decline in the Nifty 50 index, during the period. In the past week, Nifty PSU Bank index slipped 8 per cent, while Nifty Bank and Nifty Finance indices were down 6.7 per cent and 5 per cent, respectively. READ MORE

12:19 PM

BROKERAGE VIEW:: ICICI Securities on Banks

The KV Kamath Committee has submitted its recommendations on financial parameters to be factored in for restructuring of Covid-19 corporate stress. 

Our View

 

This move is positive for the banking sector as it enables restructuring of standard assets under stress amid Covid. Stricter norms for restructuring coupled with limiting the maximum restructuring tenure at two years for the residual tenure would ensure only eligible businesses get restructured. Apart from this, loan restructuring provides the required breather to borrowers, particularly from troubled sectors. For the first time, the restructuring framework is on the basis of sectors and more detailed. Hence, the invocation should be more constructive. The banking sector has total Rs 37 lakh crore exposure to these troubled sectors. Restructuring of around 15-20% range from these may not be ruled out, with PSU banks taking a larger share. We prefer large banks with the low moratorium and limited exposure to troubled sectors, efficient business models, adequate provision buffer, and capital for bolstering future balance sheet growth.