At 10.40 am, the Sensex was volatile and was hovering around the 15700 mark. Buying interest was seen in auto, metal, oil & gas, pharma and capital goods stocks. However, FMCG, realty and banking stocks were witnessing selling pressure. The BSE midcap and smallcap indices were trading with half a percent gain.
The markets have had a tremendous rally which was built largely on skepticism. A large number of investors including a number of institutional investors were left on the sidelines. So, will the markets correct now? N Jayakumar, President, Prime Securities, does not think so. He feels high networth individuals are playing cautious and don’t want to take risks. “Those who want to invest in the market don’t have the money. In that scenario, the markets will not be accommodative enough for it to fall off and allow everybody to invest. This is going to be a case of money chasing with limited success.”
Adani Power initial public offering (IPO) witnessed huge investors’ interest and was subscribed 21.64 times. The issue received bids for more than 538 crore shares as against the issue size of 30,16,52,031 shares, as per the data available on the NSE website.
Qualified institutional investors have given strong response to the issue and their reserved portion was subscribed 39.5 times. Non-institutional and retail investors’ portion subscribed 8.62 times and 2.97 times, respectively.
The NHPC initial public offer (IPO), the first one this year from the government’s stable, is being flagged off in the next few days’ time. NHPC will go on to raise up to Rs 4,000 crore. Rs 2,000 crore is an offer of sale from the government and the rest is being raised by the company. It is also significant because this is not a private sector IPO. There was a lot of talk in the budget about the lack of disinvestment but a few weeks after that, this is the first off the block from the government’s stable and surely more will follow.
This is a significant move and comes close on the heels of the Adani Power IPO, which has been over-subscribed. Usually we have seen that the primary market revivals are stoked by government supply of paper and this is a very significant one that is starting of.
The Power Ministry has given a go-ahead for NTPC to intervene in the RIL-RNRL case, the power secretary, HC Brahma, said. “It is now up to NTPC to decide whether to intervene in the RIL-RNRL case,” he said.
NTPC is also involved into a legal tussle with RIL over gas from KG basin, and any judgment in the RIL-RNRL case is expected to prejudice its own case against RIL. “NTPC may go to Supreme Court if the High Court judgement is unfavourable,” Brahma added.
It is learnt that an official announcement from both sides is likely on Monday. The reason for the delay may just be procedural. If talks were progressing as I have learnt they were, then an announcement is expected on Monday.
Also, the nine-week exclusivity period, which ended today, was originally envisaged that the actual deal transaction would happen only in August. An extension of two to four weeks to wrap up the transaction is therefore most likely. The Bharti scrip on Friday fell 3.1% while the MTN scrip rose — the underlying question is: with this transaction, if some numbers are being tweaked, what impact would they have on Bharti’s financials?
But the bottomline is that an official announcement is expected on Monday and we are looking at a deal happening in August or spilling over into September.
Krishna Sanghvi, Head – Equities, Kotak Equities, said the market was between being in a fair range to a little expensive. “Before the earnings season, we thought: let the results be absorbed in the market in terms of new upgrades, which come in and then you will find a little comfort coming in on the valuations front. So the markets are reasonably valued right now.”
“Some sort of a near-term up or downtrend can happen with the way global markets behave, so to an extent we are in a fair range right now.”
Private airlines have decided to strike on August 18 to protest against the government’s non-cooperation in helping out the bleeding aviation industry.
In an exclusive interview to CNBC-TV18, Ajay Singh, Director, SpiceJet; and Saroj Datta, Executive Director, Jet Airways; spoke on what their grievances are and why the industry has decided it cannot take losses anymore.