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Major Indian indices fell during the week after the Federal Reserve increased interest rate to tame inflation and investors were worried over an impending recession. For the week, the Sensex fell 1.36% to 61,337.81. The Nifty 50 index declined 1.23% to 18,269.
In the broader markets, the BSE Midcap index dropped 1.37% to 25,739.21, while the BSE Smallcap index shed 0.14% to settle at 29,516.75.
Top losers among Nifty sectoral indices were Media [-2.22%], FMCG [-1.82%], Realty [-1.73%], IT [-1.6%] and Pharma [-1.08%]. Top gainer was PSU Bank [0.83%]. Rest of the sectoral indices ended in the red.
During the week, FIIs were net sellers for Rs 1832.8 crore and DIIs were net buyers for Rs 3462.2 crore.
Brent Crude Oil stood at $79.04 per barrel and the WTI Crude Oil was at $74.29 a barrel.
Indian rupee fell 11 paise to 82.87 against the US dollar on Friday.
Company News
Reliance Industries (RIL): The company’s subsidiary, Reliance Digital Health, has signed definitive agreements with Synchron Inc. to acquire 2.25% stake in Synchron Inc. as part of its Series C financing round. Synchron is a clinical-stage endovascular brain computer interface (BCI) company. Since 2012, the company has been developing a BCI platform that avoids the need for open brain surgery by using a minimally-invasive procedure. The Synchron Switch BCI received FDA Breakthrough Device Designation in 2020, and is currently in human clinical trials in the US and Australia. Synchron is based in Brooklyn, New York, and R&D facilities in Melbourne, Australia.
Reliance Retail: The company’s FMCG arm, Reliance Consumer Products, has launched its consumer packaged goods brand, Independence, in Gujarat. Its product portfolio, which includes staples, processed food, and other daily essentials, was introduced to consumers and kirana partners on the centenary celebration of Pramukh Swami Maharaj at Akshardham in Ahmedabad.
Reliance Jio: The telecom arm of Reliance Industries collaborated with global technology brand OnePlus to bring in the evolutionary stand-alone 5G technology ecosystem in the country. Under the collaboration, all the OnePlus 5G devices will be powered by Jio ‘True 5G’ technology. Both the companies have been actively working together at the back-end to make 5G technology more accessible to the consumers and continue to expand their 5G technology services across the product portfolio.
Dalmia Bharat: The company announced the acquisition of cement assets of Jaypee Group’s flagship company, Jaiprakash Associates, and its associate firms for an enterprise value of Rs 5,666 crore. In a regulatory filing, the company’s wholly-owned subsidiary Dalmia Cement Bharat Limited (DCBL) has entered into a binding framework agreement for the acquisition of clinker, cement and power plants from Jaiprakash Associates Limited and its associate company. The deal includes a total cement capacity of 9.4 Million tones (MT) per annum, along with clinker capacity of 6.7 MT and thermal power plants of 280MW for an enterprise value of Rs 5,666 crore, it added.
Hindustan Petroleum Corporation Ltd (HPCL): The company will raise Rs 10,000 crore in debt from domestic or overseas market to fund its oil refining and fuel marketing operations, the company said. The company’s board approved a proposal for borrowing through further issuance of secured/unsecured redeemable non-convertible debentures/bonds/notes etc. up to Rs 10,000 crore on private placement basis in the domestic market and/or in the overseas market from the date of such approval.
Vedanta: The mining company has emerged as a successful bidder for a mining block auctioned earlier this year. Goa’s Chief Minister Pramod Sawant told reporters that Vedanta was the highest bidder with 63.55% revenue for Bicholim Mining Block, spread over 485 hectares. The state government had started the process to auction four mining blocks in the state including the Bicholim one earlier this year.
Meanwhile, Vedanta Group has signed MoUs with 30 Japanese tech firms for development of the Indian semiconductor and glass display manufacturing ecosystem. The MoUs were inked at the Vedanta-Avanstrate Business Partners Summit 2022 held in Tokyo last week. A comprehensive manufacturing plan, with potential of generating business opportunities of over Rs 3.30 lakh crore for Vedanta’s partners, was launched at the conference.
IRCTC: The central government has sold up to 5% stake in the Indian Railway Catering and Tourism Corporation (IRCTC) through an offer for sale (OFS) on the exchanges on Thursday and Friday. The floor price for the share sale was set at Rs 680 per share, which is 7.4% lower than the company’s closing price of Rs 734 on Wednesday. The stake sale is likely to mop up about Rs 2,720 crore for the central government.
Wipro: The IT services company has announced a partnership with Finastra, a global provider of financial software applications and marketplaces, to drive digital transformation for corporate banks in the Middle East. This multi-year engagement, aligned with the region’s vision to rapidly digitize and bolster cross-border trade, will make Wipro the exclusive implementation and go-to-market partner to deploy Finastra’s trade finance solutions in the region.
In other news, Wipro announced that it has signed five year multi million agreement with Mazda Motor Logistics Europe to deliver managed services for its entire application landscape. The five year strategic relationship with Wipro will help industrialize Mazda IT, digitize processes, and further enable agile software developer and operations (DevOps) ways of working while infusing state-of-the-art tools to drive automation.
Wipro announced the launch of new financial services advisory company, Capco, in the Middle East. Capco will offer strategic management and technology consulting capabilities to financial services firms in the Middle East to enable their transformation, digitisation, and business consolidation initiatives.
State Bank of India (SBI): The lender’s board has approved raising funds by way of issuance of Basel III compliant debt instrument in INR and/or any other convertible currency, up to FY24 up to an amount of Rs 10,000 crore. This is subject to concurrence from the Government of India.
ICICI Bank: The private sector lender raised Rs 5,000 crore through bonds to fund its business growth. The bonds are redeemable at the end of seven years with no special rights or privileges attached to the bonds. The bonds have a coupon rate of 7.63% payable annually and it would be listed in the relevant segment of the NSE.
Axis Bank: The private sector lender received the board approval for allotment of 12,000 non-convertible Basel-III compliant Tier-2 bonds of face value of Rs 1 crore each. The total fund raising would be at a coupon rate of 7.88% per annum payable annually, on a private placement basis.
Macrotech Developers (Lodha): The realty firm will invest Rs 330 crore to develop a premium warehousing project in Mumbai as part of its expansion plan and to tap rising demand from e-commerce and third-party logistic companies. Lodha Green Digital Infrastructure (LGDI) platform has acquired around 8 acres of land in Kurla, Mumbai. The land will be used for the development of about 4 lakhs square feet of Grade-A in-city fulfilment centre to provide the last mile warehousing infrastructure to 3PL, e-commerce and quick-commerce companies. The development of fulfilment centre is expected to be completed in the next 12-18 months in phases, it added.
Separately, Macrotech Developers (Lodha) said it has raised Rs 3,547 crore through QIP issue. It offered shares at a price of Rs 1,026 apiece for the qualified institutional placement (QIP). The offer price was set at Rs 3.25 above floor price of Rs 1,022.75 per share. The company offered 3,45,70,506 equity shares of face value Rs 10 each. The qualified institutional buyers were Kuwait Investment Authority FD 222, Kuwait Investment Authority Fund No. 202, Nomura India Investment Fund Mother Fund, New World Fund Inc and Stitching Depositary APG Emerging Markets Equity Pool.
NTPC: The state-run power producer aims to sell 20% stake in its green energy business this fiscal year, in order to raise around $363.9 million, Reuters reported. The deal marks the first green transaction by an Indian state company, which drew interest from investors like Canada Pension Plan Investment Board (CPPIB), Malaysia’s Petronas and Brookfield, the report added.
Adani Transmission: The company said it has incorporated a wholly-owned subsidiary Adani Cooling Solutions Ltd. According to its regulatory filing, the subsidiary was incorporated with an initial authorised and paid up share capital of Rs 1,00,000 each, for the purpose of carrying on District Cooling System business.
Paytm: The company’s board has approved buyback of shares worth Rs 850 crore. The company would undertake the buyback exercise at a maximum price of Rs 810 per share, nearly 50% premium to Tuesday’s closing price. Until the buyback period is completed, the company said that the management would not participate is any sale of shares.
Ultratech Cement: The cement maker commissioned 1.9 metric tonnes per annum (mtpa) greenfield clinker-backed grinding capacity at Pali Cement Works, Rajasthan. The project is part one of capacity expansion plan announced in December 2020. With this, the company’s total cement capacity in Rajasthan stands at 16.25 mtpa.
SBI: The country’s largest lender raised interest rates by 15-100 basis points (bps) on various maturities on both domestic retail deposits, and bulk deposits. A peak deposit rate of 6.75% was applicable on retail deposits on two buckets – one year to less than two years and two years to less than three years.
YES Bank: Private equity majors Carlyle Group and Advent picked 9.99% stake in the bank and would pump in around Rs 8,896 crore with full conversion of warrants into equity. The investment by the PE funds will be one of the biggest in the banking sector in recent times.
Bank of Baroda: The public sector lender plans to sell its majority stake in Nainital Bank. The board of directors of the bank has approved divestment of its majority shareholding in Nainital Bank (NBL), and authorised issuance of an advertisement inviting Expressions of Interest through a Preliminary Information Memorandum.
Bajaj Finserv: The company’s insurance arm, Bajaj Allianz General, is set to launch a surety insurance product on December 19, Business Standard reported. It will be the first general insurance company to launch the product after Finance Minister Nirmala Sitharaman said surety bonds can be used as a substitute for bank guarantees for government procurement, the report added. Similarly, SBI General Insurance and Tata AIG General Insurance are also looking at launching a surety insurance product soon, Business Standard reported citing sources.
Tata Motors: The vehicle manufacturer has received an approval from the board of directors to explore the possibility of partial divestment of its investment in subsidiary Tata Technologies [TTL] through an IPO route. The company will make further announcements of all material developments relating to the IPO.
Tata Motors will hike its commercial vehicle prices up to 2% from January 2023. The increase in prices are applicable across the entire range of commercial vehicles and it was attributed to steep rise in overall input costs.
Oil and Natural Gas Corporation (ONGC): The company said it plans to drill 53 exploratory wells in Andhra Pradesh- 50 in Godavari on-Land PML (Petroleum Mining Lease) Block of KG Basin and three in CD-ONHP-2020/1 (OALP-Vi) Block Of Cuddapah basin with an investment outlay of Rs 2,150 crore. These wells will be converted to development wells and connected to the nearest Early Production System (EPS)/ Gas Collecting Station (GCS) if proved commercially viable, the company added.
Oil & Gas companies: Indian government slashed windfall tax on crude from Rs 4,900 per tonne to Rs 1,700 per tonne. Levy on diesel exports were cut from Rs 8 per litre to Rs 5 per litre. Also, the windfall tax on aviation turbine fuel was slashed from Rs 5 per litre to Rs 1.5 per litre.
Bharti Airtel and Tech Mahindra: Airtel and Tech Mahindra have partnered to deploy a 5G captive private network at Mahindra’s Chakan manufacturing facility. The ‘5G for Business’ solution has significantly enhanced Chakan’s network connectivity that has resulted in improved speeds for software flashing, a critical operation for all vehicular dispatches. The Department of Telecommunications had issued rules for enterprises setting up captive non-public networks in June this year.
Mahindra & Mahindra (M&M): The automaker plans to invest Rs 10,000 crore over 7-8 years for an electric vehicles manufacturing plant in Pune. The investment proposal has been approved under Maharashtra Government’s industrial promotion scheme.
HDFC Bank: The lender plans to buy a minority stake of 7.75% stake in fintech start-up Mintoak Innovations for Rs 31.14 crore. Mintoak operates a payments-led platform in India, Kuwait and Mauritius. The deal transaction is expected to be completed by the end of January 2023.
Aditya Birla Capital: The company is considering selling its insurance brokerage unit as the group seeks to restructure its financial services business, Bloomberg reported citing people familiar with the matter. The company is in deal talks with potential buyers over the sale of Aditya Birla Insurance Brokers as it failed to scale up the 19-year-old business, the source said.
Economy News
A slew of economic data was released on Monday after market hours. The country’s retail inflation, which is measured by the Consumer Price Index (CPI), eased to an 11-month low of 5.88% in November 2022, down from 6.77% in October 2022. Separately, India’s factory output, measured through the Index of Industrial Production (IIP), contracted (-)4% in October 2022, according to data released by government. The Consumer Food Price Index (CFPI) or the inflation in the food basket too eased month-on-month in November to 4.67%, from 7.01% in October, the data showed.
India’s wholesale inflation measured by the wholesale price index (WPI) declined to a 21-month low of 5.85% in November 2022, from 8.39% in October and and 14.87% in November 2021, data released by the Ministry of Commerce & Industry showed. The WPI remained below the double-digit mark for the second straight month.
Asian Development Bank (ADB) has kept its outlook for India’s economic growth unchanged at 7% percent for FY23. However, the growth rate is lower compared to 8.7% GDP growth in FY22. For FY24, the GDP growth has been kept unchanged at 7.2%.
Merchandise exports stood at $31.99 billion in November 2022, up 0.59% from $31.8 billion in November 2021, according to the data released by the government on Thursday. Merchandise exports had contracted 16.7% year-on-year to $29.8 billion in October. Imports rose 3.6% to $55.88 billion in November. Trade deficit stood at $23.89 billion during November, down from $26.91 billion in October. During April-November 2022, exports stood at $295.26 billion against $265.77 billion in the same period last year.
Direct tax collection, net of refund, stood at Rs 8.77 lakh crore in November 2022. The collection was 24.26% higher than the corresponding period of the preceding year and 61.8% of budget estimates for FY23, said the Finance Ministry.
Global Markets
The US markets fell as market turned pessimistic after the Federal Reserve increased interest rate by 50 basis points at its December meeting last week. The Fed Chair Jerome Powell said fighting inflation would be the top priority and not the impact of higher interest on the economy. For the week, The Dow Jones tanked 1.7%, S&P 500 index plunged 2.1% and the Nasdaq lost 2.7%.
The US Fed raised its benchmark rate by half percentage point to a range of 4.25% to 4.5%, its highest level in 15 years. The policymakers also forecast that their key short-term rate will reach a range of 5% to 5.25% by the end of 2023.
A slew of US economic data was released during the week. The wholesale prices in the US rose 7.4% in November 2022 from a year earlier. In October, the wholesale prices was 8% and it touched a peak of 11.7% in March. Meanwhile, the US consumer price index rose 0.1% in November after advancing 0.4% in October. It increased 7.1% from a year ago, according to data released by the Labor Department. Retail sales fell 0.6% in November after rising 1.3% in October. Retail sales increased 6.5 percent year-on-year in November.
Chinese stocks declined as weaker-than-expected economic data dampened investor sentiment. The Shanghai Composite index was down 1.22%, the CSI 300 index declined 1.1% and the Hang Seng index lost 2.26%. China’s industrial production for November grew 2.2% from a year earlier, after seeing a growth of 5% in October, according to official data. Retail sales fell 5.9% on an annualized basis.
Japan’s stock markets fell during the week as investors risk appetite declined after the Fed’s rate hike decision. The Nikkei 225 index fell 1.34% and the broader Topix index was down 0.58%. The country’s recent PMI data showed that the service sector was expanding and the manufacturing sector was contracting.