Weekly Market Analysis: Benchmark indices gain 2%; RIL, RBL Bank, NTPC in news

Domestic benchmark indices closed on a strong note in the last trading week of 2021 tracking global markets as investors’ concerns over the Omicron variant waned as the number of deaths due to the new variant were less compared to earlier variants.

Benchmark indices rose more than 20 percent hitting fresh record highs helped by gradual economic recovery led by government measures, infrastructure boost, higher public spending, monetary support by RBI, strong retail participation and expansive vaccination drive to overcome the threats of the coronavirus. The Sensex touched an all-time high of 62,245.43, while the broader Nifty 50 climbed to a record high of 18,604.45 in October 2021.

For the week, Nifty 50 surged 2.06% to 17354.05 and the Sensex closed 1.98% higher to 58253.82. In the cash segment, FIIs sold for Rs 2217 crore, while DIIs bought for Rs 4273.5 crore during the week.

For the week, Top sector indices gainers were Nifty Pharma [5.4%], Auto [3%], IT [2.6%], while FMCG and Bank rose 1.8% each. During the week the gains were broad based as Nifty Midcap 100 climbed 2.8%, BSE Smallcap surged 3.9% and Nifty 500 advanced 2.3%.

Among Nifty 200 stocks, top gainers were Oil India [12.5%], Vodafone Idea [12.5%], Titan [8.8%], Dr Lal Pathlabs [8.7%] and Fortis Healthcare [8.6%]. Top losers were RBL Bank [-26.3%], Indraprastha Gas [-4.8%], Adani Green [-4%], Zee Entertainment [-3.3%] and Jindal Stell & Power [-1.8%].

Company News

Reliance Industries Ltd: The telecom arm of conglomerate Reliance Jio Infocomm is planning to raise up to Rs 8,000 crore by selling corporate bonds in the local market as early as next week, people with direct knowledge of the matter said, according to a news report by Economic Times. The corporate bond sale proceeds will be utilised to clear previous dues for purchasing spectrum in the 2014 and 2015 auctions by the government. These upcoming bonds will be in five-year, three year and two-year tenors, bearing interest rates in the range of 6.2% and 5.35%, according to the news report.

The company’s wholly-owned subsidiary Reliance New Energy Solar Ltd (“RNESL”) will acquire 100% stake in Faradion Limited for an enterprise value of GBP 100 million. In addition, RNESL will also invest GBP 25 million as growth capital to accelerate commercial roll out.

The company’s retail arm may buy minority stake in robotics firm, Addverb Technologies, according to a Mint news report. The deal is expected to be around Rs 300 crore, reported Mint, citing two people familiar with the matter.

RBL Bank: The lender has formed a panel comprising two board members, chairman of its nomination & remuneration committee and an external expert, to search and find a suitable candidate for the lender’s MD and CEO post, according to a regulatory filing. As of now, Rajeev Ahuja is acting as the interim MD and CEO after Vishwavir Ahuja was sent on leave.

The lender wrote off Rs 300 crore loan within seven months of being sanctioned that led to an intervention by the central bank, according to Mint newspaper, citing two people directly aware of the matter. RBL Bank made the loan to a company as part of a consortium of lenders in 2018 and RBI has been seeking details about the bank’s loan portfolio for the past few months. Shares of the company closed 9.42% lower. Meanwhile, RBI approved the appointment of Rajeev Ahuja as interim MD & CEO.

NTPC: The state-owned power giant’s arm NTPC Renewable Energy Ltd (NREL) will float a global engineering procurement and construction tender to set up a 3GW renewable energy project with a battery storage system worth around Rs 15,000 crore by February 2022, according to a senior official. It has also planned to bring strategic investors for NREL to bring its share of equity below 50 per cent before its listing on bourses in October 2022.

Tech Mahindra: The IT major bought 100% stake in Allyis India and Green Investments for $125 million in an all-cash deal. The company in an exchange filing said that the acquisition will bolster Tech Mahindra’s capabilities in digital experience solutions, cloud & automation, BI & analytics and technical support services.

PB Fintech Ltd: The company’s board approved an investment of Rs 700 crore, in one or more tranches, in its wholly owned subsidiary Policybazaar Insurance Brokers Pvt. Ltd. and Rs 300 crore in Paisabazaar Marketing and Consulting Pvt. Ltd. The company in an exchange filing also said that Policybazaar launched pre-qualified program for personal loans in partnership with Axis Bank.

Power Grid Corporation of India Ltd (PGCIL): The public-sector enterprise has approved Rs 322 crore investment proposal for expansion of POWERGRID telecom into data centre business, according to its exchange filing. The data centre will come up at Manesar.

IndiGO (InterGlobe Aviation Ltd): Shareholders of the company have voted to remove curbs on promoter share transfer, indicating the end of a feud at India’s largest domestic airline. The amendment to InterGlobe’s Articles of Association (AoA) is expected to lead to the exit of co-founder Rakesh Gangwal, who has been locked in a battle with co-founder Rahul Bhatia.

HDFC Bank: The lender has inked a pact with India Post Payments Bank (IPPB) to offer its banking services to the unbanked and underserved segments in semi-urban and rural areas. A memorandum of understanding was signed between HDFC Bank and IPPB to cater to the majority of over 4.7 crore customer base of IPPB.

HCL Technologies Ltd: The company’s wholly-owned step-down subsidiary, HCL America, has acquired the remaining 19.6% stake in HCL Technologies SEP Holdings. The cost of acquisition is $100.2 million. HCL Technologies SEP Holdings is the sole parent entity of Actian Corporation.

Bajaj Auto: The auto maker plans to spend Rs 300 crore to build a manufacturing plant in Pune with a capacity of producing five lakh electric vehicles per year. The manufacturing unit will cater to both domestic and export markets. The first vehicle is expected to be rolled out by June 2022.

Dish TV: The satellite service provider, which held its annual general meeting (AGM) on December 30, said that it would declare the shareholder voting results only after further directions from the Bombay High Court. Dish TV is in a legal tussle with its largest shareholder, Yes Bank, at various forums including National Company Law Tribunal (NCLT), the High Courts, and the Supreme Court.

SJVN: The state-owned hydroelectric power producer said it will invest Rs 60,000 crore to harness 5,097 megawatts (Mw) of hydropower in Arunachal Pradesh. SJVN Chairman and Managing Director Nand Lal Sharma held a meeting with Arunachal Pradesh Deputy Chief Minister Chowna Mein in New Delhi to discuss a road map to develop hydroelectric projects, according to a statement.

Raymond: The company said that it has incorporated a step-down subsidiary Ten X Realty Ltd (TXRL) to carry on real estate business for the development of land and properties at Thane, Maharashtra. In order to fund TXRL, the board of the company at its meeting approved and passed a resolution to infuse funds up to Rs 150 crore in more than one tranches over a period of time.

Economy News

Revenue from Goods and services tax (GST) collected in December 2021 was 1,29,780 crore, 13% higher than December 2020, the Finance Ministry said on Saturday.

India’s federal fiscal deficit in April-November of current fiscal year narrowed to 46.2% of the full-year budgeted target, helped by a rise in tax collections, government data showed on Friday. The fiscal deficit for eight months ending November stood at Rs 6.96 lakh crore against Rs 15.07 lakh crore target for the whole fiscal year, the data showed. In April-November, net tax receipts were Rs 11.35 lakh crore while total expenditure was Rs 20.75 lakh crore, according to government data.

India’s current account slipped into a deficit of $9.6 billion or 1.3 per cent of GDP in the September quarter, the Reserve Bank said on Friday. During the reported quarter, the deficit was mainly due to widening of trade deficit to $44.4 billion from $30.7 billion in the preceding quarter, and an increase in net outgo of investment income, the RBI said.

The country’s power consumption grew by 4.5% in to 110.34 billion units (BU) in December 2021 from 105.62 Buin December 2020, according to power ministry data. The power consumption was 101.08 BU in December 2019.

The output of eight core industries grew at the slowest pace in eight months in November, official data released on late Friday showed, indicating slowing momentum in the Indian economy. In November, core sector output expanded at 3.1% YoY, slower than the previous month’s 8.4%, as cement and crude oil production contracted 3.2% and 2.2%, respectively on a yearly basis. Steel output grew by just 0.8% YoY in November 2021.

Global markets

The US markets advanced for the week aided by the Santa Claus rally amid a thin trading activity. Investors overlooked the rising cases of the Omicron variant of coronavirus as hospitalization rates were less. Weekly jobless claims fell and the index of manufacturing activity in the Mid-Atlantic region also showed growth accelerating.

Japan’s stock market returns were muted amid a holiday-shortened week. Nikkei inched up 0.03% and Topix rose 0.28%. Japan industrial production climbed a seasonally adjusted 7.2% on month in November. On a yearly basis, industrial production improved 5.4% following the 4.1% contraction in the previous month.

Chinese markets ended slightly lower after recouping some losses by gains in realty stocks. China’s manufacturing sector continued to expand in December boosting investors’ sentiments. Manufacturing purchasing managers’ index rose to 50.3, while the non-manufacturing sector increased to 52.7. The CSI 300 index fell 0.2% and the Shanghai Composite index lost 0.1%.