HDFC To Raise Up To Rs 13,000 Crore
Shares of the mortgage lender swung between gains and losses after the company plans to raise Rs 13,000 crore to infuse capital into its banking arm, explore opportunities in health insurance and acquire stressed real estate assets.
Keki Mistry, chief executive officer at HDFC, speaks to BloombergQuint
- Looking At Creating A Company That Would Invest In Real Estate Stressed Assets.
- Too Premature To Talk About Capital Allocation Towards Stressed Real Estate.
- See Both, Organic And Inorganic Opportunities In Health Insurance.
Block Deal Alert
- Petronet LNG: About 51 lakh shares changed hands in a block deal.
- HDFC Bank: About 15.7 lakh shares changed hands in a block deal.
- Siti Networks: About 1.2 crore shares changed hands in a block deal.
Buyers and sellers were not known immediately .
Maruti’s Stock Hits Rs 10,000-Mark
Edelweiss Set To Acquire Religare’s Securities Business
Shares of Religare enterprises was locked in upper circuit for the fifth trading session after Edelweiss said it will acquire the company’s securities business.
Nitin Jain, chief executive officer of global wealth management at Edelweiss Financial Services speaks to BloombergQuint.
- Acquisition to expand client base, coverage and reach.
- Religare has over a million clients.
- Religare has over Rs 20,000 crore asset under management. It has 90 branches.
- Will make Edelweiss largest wealth management company in terms of margins.
- Religare is among top three wealth management firms.
- Wealth management business is reasonable profitable segment if you get the cost structure right.
Indian equity benchmarks swung between gains and losses after opening at fresh records. The S&P BSE Sensex Index fell as much as 0.1 percent to 33,807, while the NSE Nifty 50 Index fell as much as 0.2 percent to 10,445.
The market breadth was tilted in favour of buyers. Twelve of the 19 sector gauges compiled by the BSE Ltd. rose led by the S&P BSE Realty Index’s 0.9 percent gain.
Meanwhile, S&P BSE BankEx Index declined 0.2 percent, making it the worst performer among the sectoral indices.
Money Market Update
Indian sovereign bonds were little changed in the last session in the absence of any trigger. Yield on the 10-year note was steady at 7.18 percent.
Today, investors will focus on the minutes of the central bank meeting, which will be released after the close of markets at 5 pm. Just to recall, 5 out of RBI’s six-member panel voted to keep rates unchanged, while one voted for a rate cut. The minutes will help provide more insight on the panel’s outlook for inflation and rates.
In the currency market, investors await the final vote on the U.S tax cut legislation. The dollar index is steady and Asian stocks are trading mixed. Indian rupee is expected to take cues from local equities and may trade in a range of 63.80-64.20 a dollar.
BQ Heads Up!
- Nifty December Futures closed trade at 10,471, premium of 7.9 points from 15.6 points.
- December Futures: Nifty open interest unchanged; Bank Nifty open interest up 1 percent.
- India VIX at 12.1, down 7 percent.
- Maximum open interest for December series at 10,500 Call (open interest at 62.5 lakh, down 14 percent).
- Maximum open interest for December series at 10,000 Put (open interest at 82.9 lakh, up 2 percent).
- In Ban: Fortis, HDIL, Jet Airways, JP Associates, JSW Energy, TV18 Broadcast, Wockhardt.
- Out Of Ban: Jain Irrigation.
Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.
- Nifty PCR at 1.44 from 1.30.
- Nifty Bank PCR at 1.22 from 1.11.
Stocks Seeing High Open Interest Change
Macquarie on ONGC
- Initiated ‘Outperform’ with price target of Rs 290; implying a potential upside of 60 percent from yesterday’s close.
- Relative to expectation of $65 a barrel long-term Brent assumption.
- ONGC’s share price implies a low $52 per barrel.
- Expect production growth after five years of lacklustre performance.
- Oil and gas production to rise 35 percent by March 2022.
- Realisations and margins to gradually rise.
- Expect favourable dividend yield of 6 percent March 2022.
- ONGC-HPCL deal 1-8 percent earnigns per share accretive even if ONGC pays 50 percent premium to Hindustan Petroleum’s current share price
- Bull case price target of Rs 345: $75 a barrel long-term Brent adds Rs 55 per share.
Kotak on Maruti Suzuki
- Maintained ‘Add’; raised price target to Rs 10,300 from Rs 9,300.
- Maruti Suzuki to enjoy golden run over next 3-5 years.
- Positives: limited competition, stable industry growth and change to BS-VI from BS-IV.
- Expect operating margin to surpass historical peaks.
- Multiple triggers for margin improvement.
- Electric vehicles do not pose an immediate threat to PV industry.
JPMorgan on Tata Steel
- Balance sheet flexibility critical to pursue opportunities.
- Rights issue implies dilution of 18.5 percent based on current price.
- Financial leverage post Europe JV very manageable.
IDFC Securities on Tata Steel
- Maintained ‘Outperform’ with price target of Rs 759.
- Fund raising at 10 percent discount to current market price to lead to equity dilution of 20 percent.
- Fund raising to help in pursuing inorganic growth without stretching balance sheet.
- Buying distressed good steel assets will be a unique opportunity.
- Focus on growth opportunity in India to help in doubling capacity within next five years.
- Consolidated net debt to remain high, but manageable.
- Incremental cash flows could have taken care of expansion plans at Kalinganagar.
Morgan Stanley on Tata Steel
- Expansion at Kalinganagar positive for medium term growth.
- Expansion to increase the share of value added products to total volumes.
- Estimated Capital Expenditure implies cost of $730/tonne vs $1,300/tonne earlier.
- Fund raising to lead to 16 percent earnings per share dilution without factoring any reduction in debt.
Deutsche Bank on Jubilant Foodworks
- Maintained ‘Buy’ with price target of Rs 2,000.
- Consumer feedback positive on recent extension of ‘everyday value’.
- Expect national launch of Rs 99 price point in 2018 to enhance value-proposition positioning.
- Now low-hanging opportunity is to increase consumption frequency.
- Remains top pick in consumer discretionary.
IIFL on Oil & Gas
- Expect earnings of Oil Marketers to grow at 10 percent per annum till March 2020.
- Growth may seem moderate; Earnings visibility remains strong.
- Earnings Drivers: volume growth, expansion in marketing margins, capacity addition and strong Gross Refinery Margins.
- Oil Marketers well placed to overcome possible competition from private players.
- Favourable risk reward; Maintained ‘Buy’ on Hindustan Petroleum, Bharat Petroleum and Indian Oil.
PhillipCapital on Sintex Plastics
- Initiated ‘Buy’ with price target of Rs 145; implying a potential upside of 85 percent from yesterday’s close.
- Custom moulding: Stable and sustainable growth.
- Retail to provide higher growth because of GST.
- Prefab business to grow on spending on healthcare, education, and sanitation.
- Expect revenue, operating income and net profit to grow at a compounded rate of 9 percent, 6 percent and 10 percent respectively by March 2020.
- Sintex Plastics cash profit to help deleverage its balance sheet.
- In strong position to capitalise on economic recovery and growth in retail, warehousing and cold chain post GST.
- Astron Paper and Board Mill subscribed 12.4 times on final day.
- KNR Construction: Promoter Kamidi Yashoda sold 16 lakh shares or 1.1 percent equity at Rs 276 each.
- Orchid Pharma: Serum Institute of India sold 7.05 lakh shares or 0.8 percent equity at Rs 19.37 each.
- Tara Jewels: Promoter Rajeev Vasant Sheth sold 4.66 lakh shares or 1.9 percent equity at Rs 19.32 each.
- ICICI Prudential MF bought 22.59 lakh shares or 2.2 percent equity at Rs 157 each.
- Jwalamukhi Investment Holding sold 26.42 lakh shares or 2.6 percent equity at Rs 157.03 each.
- Ashish Kacholia bought 2 lakh shares or 1.1 percent equity at Rs 525 each.
- Reliance Alternative Investment Fund I sold 2 lakh shares or 1.1 percent equity at Rs 525 each.
- Societe Generale bought 42.78 lakh shares or 0.1 percent equity at Rs 523.25 each.
- Morgan Stanley Mauritius sold 5.22 lakh shares or 0.01 percent equity at Rs 523.25 each.
- Morgan Stanley France SAS sold 37.56 lakh shares or 0.1 percent equity at Rs 523.25 each.
- Societe Generale bought 15 lakh shares or 0.1 percent equity at Rs 1883.5 each.
- Morgan Stanley France SAS sold 15 lakh shares or 0.1 percent equity at Rs 1883.5 each.
- Societe Generale bought 71.19 lakh shares or 0.1 percent equity at Rs 310.5 each.
- Morgan Stanley France SAS sold 71.19 lakh shares or 0.1 percent equity at Rs 310.5 each.
- Societe Generale bought 15.84 lakh shares or 0.1 percent equity at Rs 1012.5 each.
- Morgan Stanley France SAS sold 15.84 lakh shares or 0.1 percent equity at Rs 1012.5 each.
- Societe Generale bought 3.21 lakh shares or 0.01 percent equity at Rs 411.25 each
- Morgan Stanley France SAS sold 3.21 lakh shares or 0.01 percent equity at Rs 411.25 each.
- Yes Bank-EIB invest $400 million in wind and solar projects (Economic Times).
- Star India is planning to telecast IPL in six languages (Economic Times).
- Promoter can bid for MBL Infra, rules NCLT (Economic Times).
- Edelweiss in talks to buy Religare’s broking arm (Economic Times).
- Tata Tele Maha (TTML) seeks relief on loan front (Economic Times).
- Essar Shipping to raise capacity 39% by 2020 (Financial Express).
- Myntra aims to boost sales from flagship year-end event by 50 percent (Mint).
Stocks To Watch
- Edelweiss to Acquire Religare’s Securities business.
- HDFC to raise up to Rs 13,000 crore by issuing a mix of instruments. Up to Rs 8,500 crore will be used to subscribe to the preferential allotment of HDFC Bank.
- Tata Steel to increase the capacity of Kalinganagar plant to 8 MTPA with capital expenditure of Rs 23,500 crore.
- Tata Steel to raise up to Rs 12,800 crore through rights issue.
- Welspun Enterprises will not invest in Welspun Financial. Instead the amount earmarked for NBFC venture will be used for further growth in infrastructure space.
- Consortium of GMR-Megawide emerged as the preferred bidder for the Clark Airport project in Philippines.
- Matrimony.com received Rs 12.81 crore from promoter and managing director.
- AU Small Finance Bank signed agreement with Sahaj E-village for providing banking and financial services.
- Garden Silk Mills says promoters to pledge 51 percent of the total paid up equity in favour of IDBI Trusteeship.
- Indian government withdraws stock holding and turnover limit on sugar dealers with immediate effect.
- Indian Bank to raise Rs 7,000 crore through issue of shares.
- Emami Infra holders to consider absorbing Zandu Realty on Jan. 20.
- IndusInd Bank says CCI approved merger of Bharat Financial.
- Stagflation risks could see India hold rates through 2018.
- India probing DLF, firms related to Indiabulls, Shapoorji: Shukla.
- India 2017-18 sugar production seen at 24.9M Tons: Ministry.
- India’s crude oil imports climb to fresh record in November.
- Four development challenges for the BJP government in Gujarat.
- Import duty hike may affect operating margins of pet coke-importing cement companies.
- Difficult to pinpoint demonetisation impact on economy, Finance Ministry says.
- Airtel deposits ‘interim penalty’ of Rs 2.5 crore for using aadhaar data without consent.
- Apple picks Michel Coulomb to head India operations.
- No proposal for mandatory Aadhaar Linkage for property deals, government informs Parliament.
- Government restarts hiring process of RBI Deputy Governor.
- Vedanta asks government to sell majority stake in PSUs to cut import bill.
- India’s data requests to Facebook up 55 percent in first half of 2017.
- Brent crude ended higher at $63.80 per barrel, up 0.6 percent.
- West Texas Intermediate crude was little changed at $57.69 a barrel after advancing 0.7 percent Tuesday.
- Gold was at $1,261.96 an ounce.
- Sugar ended near two-week high of 14.41 cents per pound; up 4.7 percent.
- Steel trades lower for second day; down 0.05 percent.
- Aluminium trades higher; up 0.7 percent.
- Zinc trades flat.
- Copper trades higher for nine consecutive session; up 0.4 percent.
- Rubber trades higher; up 0.8 percent.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 10,438 as of 8:40 a.m.
Asian stocks were mixed on Wednesday after U.S. benchmarks dipped, with investors awaiting the final votes on U.S. tax-cut legislation.
With the Republicans closing in on a legislative victory that would give corporations lasting tax cuts, investors are assessing how the bill will impact the world’s largest economy. It’s largely anticipated to add to growth in the next year, but the longer-term impact is less certain.
Here are some of the key events scheduled for this week:
- The U.S. and U.K. publish updated estimates of third-quarter GDP.
- The U.S. House of Representatives voted to approve the tax bill Tuesday, but will have to vote again today because the current draft doesn’t comply with Senate rules.
- The Bank of Japan meets on Thursday to set monetary policy.
- Catalonia votes in an election Thursday that will pose a test for the Spanish region’s secession movement.