Signage of HDFC Bank seen at one of its branch in Bengaluru, India. (Photographer: Anirudh Saligrama/BloombergQuint)

BQEdge | Are Traders Getting Nervous About HDFC Bank’s Stock?

BQEdge is specially curated for BQBlue subscribers. Every day this note will offer special equity market and stock-specific insights and flag select emerging trends in the tricky-to-trade derivatives market.

On Today’s Edition:

  • Are traders getting nervous about HDFC Bank?
  • A big overhang on Grasim Industries’ stock.

Anxiety Surrounding HDFC Bank

Bad Call For Grasim Industries?

Grasim Industries Ltd. is set to become a net debt company.

The Aditya Birla Group company will participate in the Rs 25,000 crore rights issue by Vodafone Idea Ltd., which will put a strain on its balance sheet.

India’s largest telecom company by subscribers yesterday announced its largest-ever fundraising via a rights issue to bolster its network and to take on Bharti Airtel Ltd. and Reliance Jio Infocomm Ltd.

Grasim, which owns 11.55 percent stake in Vodafone Idea, will have to chip in with Rs 3,154 crore, according to BloombergQuint’s calculations. Earlier, Vodafone Idea had raised close to Rs 6,750 crore, of which Rs 3,250 crore was infused by privately held group companies, while the remaining was infused via QIP.

As of Sept. 2018, Grasim had net cash of Rs 909 crore on a standalone basis, as per the company filings. The street is concerned that amid the ongoing capex plans, the additional investment burden would put an undue stress on the company's balance sheet.

Grasim on an average generates quarterly cash of Rs 1,000 crore. It has planned capital expenditure of more than Rs 4,500 crore on a standalone basis. In a note dated Nov. 14, brokerage Edelweiss Securities said any fund infusion, if it happens into Vodafone Idea entity, would be a big overhang for the stock.