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Dalal Street fell during the week as the RBI increased the repo rate to tame inflation and cut the GDP forecast for the current fiscal. For the week, the Sensex fell 1.09% to 62,181.67 and the Nifty 50 index lost 1.07% to 18,496.60.
In broader markets, the BSE Midcap index dropped 0.86% to 26,095.56. The BSE Smallcap index lost 1.18% to 29,558.56.
Top losers among Nifty sectoral indices were IT [-6.07%], Realty [-3.41%], Energy [-2.43%], Pharma [-2.39%] and Media [-2.15%]. Top gainers were PSU Bank [4.77%], FMCG [2.23%] and Bank [1.23%].
In cash segment, FIIs were net sellers for Rs 4306.1 crore and DIIs were net buyers for Rs 3712 crore.
Indian rupee settled 15 paise lower at 82.27 against the US dollar on Friday.
Company News
State Bank of India (SBI): The lender will seek approval for raising Additional Tier 1 (AT-1) capital by way of issuance of Basel III compliant debt instruments in INR or any other convertible currency. The fund raising will be done through a public offer or private placement to Indian or overseas investors up to 31st March, 2024.
State Bank of India said that it has crossed Rs 5 lakh crore mark in personal banking advances. The bank added Rs 1 lakh crore to the portfolio in 12 months. Personal banking advances include unsecured personal loans, auto loans, pension loans, education loans, gold loans, etc.
HCLTech: Shares of the company tanked over 7% in intraday trade on Friday after the company management indicated that growth for FY23 will come in at the lower end of the 13.5-14.5% range. The company said furloughs have been far greater than what it had anticipated. Moreover, brokerage firm Credit Suisse expects India’s top four Indian IT companies to witness a 10-27% valuation-led correction and high risk of revenue downgrades due to weak global macroeconomic conditions.
Adani Ports and Special Economic Zone (APSEZ): The company said that it has handled a cargo volume of approximately 25.3 million metric tonnes (MMT) in November 2022, registering a growth of 2.26% from 24.74 MMT recorded in November 2021. The rise in total cargo volume factors year on year (YoY) growth of 6% in container volumes and 2% in dry bulk cargo. During April-November 2022, APSEZ registered approximately 228 MMT of cargo volumes, implying a 9% YoY growth.
Adani Ports said that it has submitted a resolution plan in the insolvency process of Karaikal Port in Tamil Nadu. Adani Ports clarified that the said process is underway and no conclusion has been reached yet. After the successful bidder is announced, the plan will be subject to approval from the National Company Law Tribunal.
Adani Enterprises: The company has acquired 100% stake in Alluvial Mineral Resources, from Adani Infra (India). Alluvial Mineral Resources is engaged in mining of minerals & ores activities and other allied activities.
Maruti Suzuki: The company is offering discounts on its Arena lineup — Alto K10, Wagon R, Celerio, Swift and Dzire — for December with savings of up to Rs 52,000. Brokerage firm Nomura said that the rising discount on small cars is a sign of weak demand for such models.
Maruti Suzuki will recall 9,125 vehicles manufactured between November 2 and 28, 2022, due to a suspected defect in a seat belt component. The affected models are Ciaz, Brezza, Ertiga, XL6 and Grand Vitara. The company said inspection and replacement of the faulty part will be free of cost.
Vedanta: The mining conglomerate has approved the issuance of NCDs up to Rs 800 crore. The NCD sale will have a base issue size of Rs 500 crore and green shoe option of Rs 300 crore.
Axis Bank: The lender announced that it will raise Rs 12,000 crore via unsecured, rated, listed, subordinated, taxable, non-convertible, Basel III compliant Tier II bonds with a green shoe option of Rs 11,000 crore, according to its exchange filing.
Infosys: The IT services company commenced its fourth share buy-back amounting to Rs 9,300 crore. The buy-back will be at a price not greater than Rs 1,850 per equity share having a face value of Rs 5 each through the open market route. The company will be utilising at least 50% of the maximum amount fixed for the buyback i.e. Rs 4,650 crore.
TVS Motor Company: The company’s subsidiary, TVSM Singapore, has acquired 100% stake in BBT 35/22 Vermogensverwaltungs GmbH for 25,000 euro. The acquired company’s name is likely to be changed to Celerity Motor GmbH. With this buyout, the company plans to undertake activities related to two-wheeler & three-wheeler vehicles, including research, development, engineering, sales and service.
Ashok Leyland: The automaker has appointed Shenu Agarwal as MD And CEO of the company for five years. Agarwal joins Ashok Leyland from Escorts Kubota, where he was President.
Hinduja Global Solutions (HGS): The company has entered into a definitive agreement to acquire a 100% stake in TekLink International for a consideration of $58.8 million and the transaction is expected to close in the next two months. Further, HGS has signed a non-binding Letter of Intent (LoI) to acquire uKnowva, a digital Human Resources Management System (HRMS) product business, from Convergence IT Services.
Larsen & Toubro (L&T): The company’s arm, L&T Construction, secured orders from ArcelorMittal Nippon Steel India to carry out their expansion plans in Gujarat and Odisha. The orders involve installation of two blast furnaces at Hazira, Gujarat, building a 6 MTPA ore beneficiation plant at Sagasahi, Odisha among others. The said order is a ‘mega’ order and L&T classifies ‘mega’ orders as those valued above Rs 7,000 crore.
5Paisa Capital: In an exchange filing, the company’s board announced that they have acquired IIFL Securities’ online retail trading business. IIFL Securities shareholders will receive 1 share of Rs 10 paid up of 5Paisa Capital for every 50 shares of Rs 2 paid up of IIFL Securities held by them as on the record date. The company’s customer base will increase by 40% after the acquisition, while the equity dilution will be at 20%.
LTIMindtree: The company formed after merging LTI Infotech and Mindtree traded on the exchanges for the first time on Monday after the share swap. The shares of the merged entity opened 18 rupees higher on Monday at Rs 5,086.8. LTIMindtree has become India’s fifth largest IT services company by market capitalisation. While the erstwhile, Mindtree stock has been delisted from stock exchanges.
A Mindtree shareholder will get 73 fully paid-up shares of Re 1 each of LTIMindtree for every 100 shares of Rs 10 each of Mindtree. This is subject to the shareholder having Mindtree shares in the demat account till November 24. If Mindtree shareholder is holding less than 100 shares, then, for every 10 shares of Mindtree, the shareholder will be allotted 7.3 LTIMindtree shares.
Hindustan Unilever Ltd (HUL): The FMCG company will acquire a 51% stake in Zywie Ventures’ OZiva for a cash consideration of Rs 264.28 crore. The remaining 49% will be acquired at the end of 36 months on pre-agreed valuation criteria, the company said. Separately, HUL will acquire a 19.8% stake for a cash consideration of Rs 70 crore. With this acquisitions, the company plans to foray into the health and wellbeing segment.
Jindal Steel & Power (JSPL): The company has acquired Monnet Power Company for a consideration of Rs 410 crore under the insolvency resolution process. JSPL last month won the bid for Monnet Power, which has a 1050 MW under-construction power plant in Odisha’s Angul. The company is likely to spend another Rs 1,500 – 2,000 crore as capital expenditure for the newly acquired assets of Monnet Power, which is expected to be fully operational in the coming 1-1.5 years.
IDFC First Bank: The private lender and NASSCOM Centre of Excellence have partnered to grow the innovation ecosystem and guide startups through a range of banking solutions. A Memorandum of Understanding was signed between the two organisations and IDFC First Bank will be the preferred banking partner for startups in Bengaluru.
Economy News
The Reserve Bank of India’s Monetary Policy Committee (MPC) hiked the repo rate by 35 basis points (bps) to 6.25 % in its recent meeting. The RBI cut its FY23 GDP growth rate forecast to 6.8% from 7% earlier. The RBI Governor said that the Indian economy remains resilient and the country is seen as a bright spot in a gloomy world.
The RBI estimated the real GDP growth for FY23 at 6.8%, with the third quarter at 4.4% and the fourth quarter at 4.2%. Gross Domestic Product (GDP) growth is projected at 7.1% for April-June period of FY24 and at 5.9% for Q2FY24.
The MPC said that the inflation forecast for the current financial year will be 6.7%. CPI inflation is seen at 6.6 per cent in October-December compared with 6.5% projected earlier. In January-March, headline retail inflation is seen at 5.9% as against 5.8% estimated earlier. For the first quarter of the next fiscal, the MPC has retained its inflation forecast at 5%, while inflation is seen at 5.4% in the second quarter of the next financial year.
Meanwhile, the seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 56.4 in November 2022, from 55.1 in the preceding month. The recent reading signalled an increase in output on the back of higher demand, successful marketing and a sustained upturn in sales. Further, the S&P Global India Composite PMI Output Index, which measures combined services and manufacturing output, increase to to 56.7 in November from 55.5 in October.
Global Markets
The US markets fell during the week as strong economic data weighed on investor hopes that the Fed would slow down the pace of interest rate hikes. For the week, the S&P 500 plunged 3.38%, the Dow fell 2.78% and the Nasdaq tanked 3.99%.
The Institute for Supply Management’s (ISM’s) index of services sector activity rose to 56.5 in November 2022 from 54.4 in October 2022. The ISM signalled a pickup in business activity, especially in real estate and food services and accommodation. The producer price inflation (PPI) rose 7.4% on a year-over-year basis compared with an 8.1% advance in October 2022 and a consensus expectations of around 7.2%.
Chinese stock markets rose as investor sentiments were boosted by Beijing’s easing of Covid-19 curbs. The Shanghai Composite index advanced 1.6%, the CSI 300 index gained 3.3% and Hang Seng soared 6.56%.
China’s services activity contracted to six-month lows in November 2022 as widening Covid-19 containment measures weighed on demand and operations. The Caixin/S&P Global services Purchasing Managers’ Index for November came in at 46.7, compared to October’s reading of 48.4. China’s producer price index fell 1.3% in November 2022 compared to a year-ago period. The country’s consumer price index rose 1.6% in November on an annualized basis. Meanwhile, China’s exports fell a 8.7% in November 2022 from a year earlier, marking the sharpest monthly fall in exports since February 2020.
Japan’s stock markets closed higher for the week, with the Nikkei 225 index rising 0.44% and the broader Topix index up 0.39%.
Japan’s gross domestic product (GDP) shrank an annualized 0.8% in the third quarter of the year, compared to 1.2% contraction indicated by initial estimates. Data showed household spending, a key indicator of private consumption, increasing 1.2% year-on-year in October 2022.