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Domestic equity indices closed lower for the week as investor sentiments were dampened due to negative global cues and hawkish comments from Fed officials. On a weekly basis, the Sensex declined 0.64% to 62,979.37. The Nifty 50 index shed 0.85% to close at 18,665.50. The BSE Midcap index tanked 1.25% to 27,977.34. The BSE Smallcap index fell 0.93% to 31,991.18.
Meanwhile, the Sensex hit a new all-time high of 63,601.71 on June 22, 2023. Additionally, on June 21, the S&P BSE Midcap index recorded an all-time of 28,745.47 and the S&P BSE Smallcap index registered record high at 32,765.32 during the week.
For the week, top losers among Nifty sectoral indices were Media [-3.62%], Metal [-3.12%], Oil & Gas [-2.34%], FMCG [-2.21%], and Consumer Durables [-2.17%]. Top gainer was Financial Services [0.3%].
Indian rupee fell 7 paise to close at 82.03 against the US dollar on Friday.
For the week, FIIs were net buyers for only Rs 1.5 crore in the cash segment. FIIs were net sellers for four out of the five days in the week. They bought for Rs 4,013 crore on Wednesday, while they were sellers for the rest of the days. DIIs were net buyers for Rs 1693.1 crore during the week.
Company News
Reliance Industries Limited (RIL): The conglomerate has received the Reserve Bank of India (RBI)’s approval to retain $2 billion over and above the $3 billion loan it had raised during the last financial year, The Economic Times (ET) reported citing sources. RIL had to seek RBI’s permission since the funds raised was more than the limit set by the central bank, the report said. The funds are likely to be used for the company’s working capital and also expansion in energy and telecom businesses.
InterGlobe Aviations (IndiGo): The airline has placed an order for 500 Airbus A320 Family aircraft. This will provide IndiGo a further steady stream of deliveries between 2030 and 2035, the press release said. This 500 aircraft order is not only IndiGo’s largest order, but also the largest-ever single aircraft purchase by any airline with Airbus. With this new order, since its inception in 2006, IndiGo has ordered a total of 1,330 aircraft with Airbus.
Adani Enterprises: AdaniConneX, a joint venture between Adani Enterprises and EdgeConneX, has executed a $213 million senior debt facility with participation from international banks to finance its under-construction data center portfolio of 67 MW in Noida and Chennai. ING Bank N.V., Mizuho Bank, MUFG Bank, Natixis, Standard Chartered Bank, and Sumitomo Mitsui Banking Corporation have committed to the facility. The company said that access to wide pool of liquidity strengthens AdaniConneX strategy to fast-track the implementation of the under-construction asset portfolio.
Tata Consultancy Services (TCS): The IT services company and UK’s largest workplace pension scheme National Employment Savings Trust (NEST) have expanded their long-standing partnership to focus on digitally transforming NEST’s scheme administration services, and delivering enhanced member experiences. The contract value was signed for 840 million pounds with an initial tenure of 10 years.
Adani Transmission: The company said it has received shareholders’ approval to raise up to Rs 8,500 crore through issuance of equity shares on qualified institutional placement basis. According to the company’s regulatory filing, 98.64% votes were polled in favour of the resolution. The raised funds will be used for the desired growth and expansion of the company.
Larsen & Toubro (L&T): The company announced that it has signed a contract with DRDO for realisation of two Air Independent Propulsion (AIP) System Modules for Kalvari Class of Submarines of the Indian Navy. After realisation and integration of these modules in the submarines, India will join an elite club of a handful of nations who have indigenously developed fuel cell based submarine AIP technology which is critical for increasing the endurance of conventional submarines. L&T said that it is the recipient of Transfer of Technology (ToT) for this DRDO developed AIP System.
L&T said in an exchange filing that it has expanded its hi-tech manufacturing capability by inaugurating a new advanced Heavy Wall Pressure Vessel facility in Saudi Arabia, that mimics L&T’s bespoke capabilities in India, as a part of the IKTVA initiative of Aramco and Saudi Vision 2030, to enhance local manufacturing.
Bharti Airtel: The company and Matter Motor Works have announced a strategic partnership to deploy Airtel’s IoT solution in Matter AERA, India’s first and only geared electric motorbike. As part of the partnership, Airtel will enable advanced automotive grade E-Sims on all Matter AERA bikes. In the first phase, 60,000 Matter bikes will be enabled with Airtel E- Sims with advanced IOT features. Matter plans to produce over 3,00,000 such bikes over the next three years. Airtel’s advanced IoT platform will help with the real time tracking of these vehicles, monitoring performance with advanced analytics while maintaining extremely high reliability augmented by telco grade security.
Bharti Airtel has entered into an agreement to acquire 12.07% equity shares in Egan Solar Power, a special purpose vehicle formed for the purpose of owning and operating the Captive Power Plant.
BEML: The state-owned company has won an order worth Rs 423.11 crore from the Ministry of Defence for the supply of high mobility vehicles, according to its exchange filing.
UPL: The company said that it has spun off specialty chemical business on a slump sale basis as a going concern to wholly-owned subsidiary UPL Speciality Chemicals for consideration of Rs 3,752 crore. Further, it has separated the global seeds business vertical under ‘Advanta Enterprise’ and India crop protection business and digital business under ‘UPL Sustainable Agri Solutions (UPL SAS)’. The company has raised $500 million by divesting minority stakes in Advanta Enterprises (13.3% ) and UPL SAS (9.1%) to global investment firms Abu Dhabi Investment Authority, KKR and Brookfield at a ‘significant valuation premium’. The business realignment is expected to be completed within four months.
Dr Reddy’s Laboratories: The company announced its entry into the trade generics business in India with the launch of its new dedicated division ‘RGenX’. Through this, Dr. Reddy’s aims to provide patients with access to a wider range of products and increased affordability. The new business will further the company’s goal of reaching over 1.5 billion patients by 2030.
Asian Paints: The company has acquired further 11% of the equity share capital of White Teak (earlier known as Obgenix Software Private Limited) for a consideration of Rs. 54 crores (approx.) from the promoters of White Teak. With this acquisition, Asian Paints now holds 60% of equity share capital of White Teak, and White Teak has become a subsidiary of the company.
Hindustan Aeronautics Limited (HAL): General Electric (GE) Aerospace, a subsidiary of General Electric, has signed a Memorandum of Understanding (MoU) with HAL to co-produce its F414 engines in India. Separately, HAL and Fabrica Argentina de Aviones (FAdeA) have signed a Memorandum of Understanding (MoU) to explore potential collaboration opportunities in the field of Maintenance, Repair, and Overhaul. It also plans to address any offset requirements that may arise from the possible sale of HAL-made platforms in the Latin American (LATAM) region.
Raymond: The clothing company said that the board has approved allotment of non-convertible debentures (NCDs) for Rs 1,100 crore on private placement basis to its associate company, Raymond Consumer Care. The deemed date of allotment is on 22 June 2023. The NCDs will have a coupon rate of 8.75% p.a. and has tenure of 730 days.
Subros: Shares of the company were locked in a 20% upper circuit after Union Minister for Road Transport and Highways Nitin Gadkari said that he has approved the proposal for making ACs compulsory in all truck cabins. With this development, all truck cabins will have to be mandatorily air-conditioned starting in 2025.
Vedanta: The company’s parent organisation Vedanta Resources (VR) plans to repay a debt of $2.2 billion in the current financial year, through measures like brand monetisation, refinancing, and transfer of general reserves to retained earnings to meet its repayment deadlines, The Economic Times (ET) reports. Out of the total debt repayment of $4.2 billion falling due in FY24, the company has already paid $2 billion in the first quarter, the report added.
Housing Development Finance Corporation (HDFC): HDFC has sold a 90% stake in HDFC Credila to a consortium of Baring Private Equity Asia and ChrysCapital for Rs 9,060.4 crore. HDFC Credila will receive additional fresh capital of Rs 2003.61 crore as a part of the proposed transaction. The company will hold less than 10% of Credila after the stake sale.
Coforge: The IT services firm has acquired the final tranche of shares of the balance 20% stake in Coforge Business Process Solutions for Rs 336.94 crore. In April 2021, it had acquired 60% of 80% stake in Coforge Business Process Solutions. Its total stake in Coforge Business Process Solutions stands at 80% now.
Pidilite Industries: The company has launched its manufacturing facilities under its two joint ventures, Pidilite Litokol and Tenax Pidilite in Amod, Gujarat. Litokol SPA Italy and Tenax SPA Italy have transferred technology to Pidilite as part of the joint venture. Pidilite will be leveraging its distribution network to sell epoxy, urethane grout, certain epoxy adhesives for tile application and stone care range products.
Global Markets
The US markets closed lower as investors were concerned over more interest rate hikes in the coming months as Fed Chair said inflation remained high and has a long way to go to bring down the inflation to 2%. The Dow Jones index fell 1.67%, the S&P 500 index shed 1.39% and the Nasdaq lost 1.44%.
Federal Reserve Chairman Jerome Powell said policymakers are still committed to using rates to bringing down inflation, but are going to move slowly.
Meanwhile, the S&P Global Flash Composite Output Index — which gauges activity in the manufacturing and services sectors — fell to 53 in June from 54.3 in May. However, the index showed that the private sector economy expanded as the reading came above 50.
Japanese market ended in the red as higher consumer inflation dampened investor sentiments as well as on profit booking. The Nikkei 225 index fell 2.7% and the broader Topix index closed 1.6% lower.
Japan’s consumer price index (CPI) rose by 3.2% YoY in May, which was higher than estimates. The latest inflation number showed that inflation slowed from 3.5% recorded in April, but remained well above the BoJ’s 2% inflation target. Japan’s core inflation rate in May eased slightly to 3.2% year-on-year, from April’s 3.4%. Further, the au Jibun Bank Flash Japan composite PMI, which covers both manufacturing and service sector activity, stood at 52.3 in June, down from a decade high of 54.3 in May.
The yield on the 10-year Japanese government bond fell to 0.36% from 0.41% at the end of the preceding week. The Japanese yen weakened to about JPY 143.1 against the US dollar from about JPY 141.8 in the previous week.
Chinese shares fell on a weekly basis due to weak investor optimism over the lack of stimulus measures to prop up the flagging economy. The Shanghai Stock Exchange index dropped 2.3%, the CSI 300 tanked 2.51%, and the Hang Seng index plummeted 5.74%.
The Chinese central bank slashed its one-year and five-year loan prime rate by 10 basis points each to 3.55% and 4.20% respectively.