All You Need To Know Going Into Trade On July 3

Stocks To Watch

• Reliance Industries: Intel Capital to invest Rs 1,894.5 crore in Jio Platforms for 0.39% stake. Deal values Jio Platforms at Rs 4.91 lakh crore and an Enterprise Value of Rs 5.16 lakh crore. Total investment amount in Jio Platforms now at Rs 1,17,588.45 crore.
• HDFC Life: To be included in the Nifty 50 index from July 31. Vedanta to be excluded from the index on account of its proposed delisting. Replacement is also applicable to the Nifty 50 equal weight index.
• JB Chemicals: KKR to acquire controlling stake in the company. Promoters to sell 4.17 crore shares or 54% of the total voting share capital for Rs 3,109 crore. The deal will take place in four tranches. An open offer or 2.01 crore shares or 26% of the total voting share capital has been triggered. The open offer aggregates to Rs 1,497 crore at an offer price of Rs 745 per share. The offer price is a 4% premium to Thursday's closing price. Promoter stake after the first two tranches to fall to 17.01% from 55.91%, falling further in the next two tranches.
• PI Industries: Launches QIP issue at a floor price of Rs 1,534.24 per share. The floor price is a 2% discount to Thursday's closing price. The company may offer a discount of not more than 5% on the floor price. Indicative deal size is worth Rs 2,000 crore.
• HUL and Emami: HUL to rename fair and lovely range of products to glow and lovely while the men's range will be renamed as glow and handsome. Emami says it has legal ownership of Fair and Handsome trademark. Emami's email statement went on to state that they are not surprised at HUL's unfair business practices which has been prevalent time and again to damage its brand image. A spokesperson for HUL in an emailed statement to BloombergQuint said that they do not wish to comment on Emami's statement and that they are fully aware of their rights and protect them at all forums.
• Axis Bank: To wind down operations of Axis Bank U.K. and target the surrendering of the banking licence by April 2021. The same has been reviewed by U.K. regulators. The bank in an exchange filing said that it has a clear objective to focus on the Indian Banking market and harness the potential there. The move will have no material impact on operations or financial position of the bank.
• Divi’s Laboratories: CFO L Kishore Babu is seeking legal advice and will respond to SEBI’s order for alleged charges of insider trading in securities of the company during July 2017.
• Affle India: To acquire 8% stake in OSLabs for $2.86 million. OSLabs operates Indus App Bazaar, which is India’s largest independent indigenous apps store and partners with OEMs in India.
• Muthoot Finance: To seek shareholders approval for share split and to increase borrowing powers of the Board from existing Rs 50,000 crore to Rs 75,000 crore on July 18.
• Defence Stocks: Bloomberg News reports that the Ministry of Defence cleared proposals worth Rs 38,900 crore on Thursday. This includes acquisitions from Indian industry worth Rs 31,300 crore. The panel also approved proposal to procure 21 Mig-29 plans along with upgrading the existing 59 Mig-29 aircrafts. It also approved procurement of 12 Su-30 MKI Aircraft. Su-30 MKI will be procured from Hindustan Aeronautics at an estimated cost of Rs 10,730 crore.
• Reliance Industries: Clarifies on news of nearing a deal to acquire the retail business of the Future Group. Says that it is evaluating opportunities on an ongoing basis.
• Jyothy Labs: Opens a new dish wash manufacturing unit adjacent to the company’s existing plant situated in Madhya Pradesh.
• CG Power: Company working on a debt resolution plan with its lenders and certain potential investors have signed non-disclosure agreements with the company to undertake due dilligence. None of these however, have culminated into binding offers by potential investors which have been accepted by the company or its lenders. This was in response to reports of Murugappa Group investing Rs 750 crore in the company.
• Cadila Healthcare: Covid-19 vaccine by Zydus gets regulatory approval to initiate Phase I/II human clinical trials in India. The company plans to start human clinical trials in July 2020. Pre-clinical development is successfully completed. The vaccine is found to be immunogenic in multiple animal species.
• GPT Infra: Gets order worth Rs 102.8 crore from NHAI.
• Excel Industries: Stopped manufacturing activities of its Roha plant till July 5, due to increase in Covid-19 patients near the area.
• IRB Infra: Allotted NCDs worth Rs 200 crore on a private placement basis.
• VST Tiller Tractors: Power Tiller sales down 20% in June to 2,675 units while tractor sales up 11% to Rs 805 units. Comparisons made on a year-on-year basis.
• March Quarter Earnings Today: Indiabulls Housing Finance, GATI, SAIL.

Motherson Sumi’s Group Restructuring

• Board of Directors approve reorganisation plan
• To demerge Domestic Wiring Harness business from Motherson Sumi into a new company, which is in the process of being incorporated into a wholly-owned subsidiary.
• For every one share of Motherson Sumi, one share of the new company will be allotted.
• The new company will eventually be listed.
• Subsequently merge Samvardhana Motherson International into Motherson SUmi to consolidate 100% shareholding in Samvardhana Motherson Automotive Systems Group.
• For every 10 shares held in Samvardhana Motherson International, 51 shares of Motherson Sumi will be allotted.
• Motherson Sumi will then be renamed as Samvardhana Motherson International Ltd.
• The transaction is likely to be completed by Q2FY22.

Brokerage Radar

CLSA On Indian Autos

• Estimate tractor industry to grow at 15% year-on-year
• Two-Wheelers outperformed Passenger Vehicles
• Potential upside risks for tractors while CVs may see downside risk
• Continue to prefer rural-focused & non-discretionary categories
• Top Picks: Hero MotoCorp, Mahindra & Mahindra

JPMorgan On Bharat Electronics

• Overweight rating maintained
• Price target raised to Rs 100 from Rs 95
• Raise FY21 and FY22E EPS estimates by 5%
• Share of non-defence business was surprisingly high
• Overall margin performance strong despite higher share of low margin non-defence business
• Trade receivables rose to 195 days in FY20
• Can deliver 6.5% revenue growth in FY21

HSBC On Bajaj Finance

• Buy rating maintained
• Price target of Rs 3,500
• Continues effort towards making business granular
• RoA at 3.6% remains best in class
• Healthy risk-adjusted returns, strong cross-sell momentum and ability to absorb asset quality shocks
• Prepared to navigate near-term challenges
• Expect fresh delinquencies and credit costs to rise in the near-term before normalising at lower levels

Downside Risks:

• Longer-than-expected lockdown
• Large-scale job losses resulting in higher credit costs in the unsecured loan portfolio
• Slower than expected return of demand

Edelweiss On Motherson Sumi

• Buy rating maintained
• Price target of Rs 117
• Simplified business structure is welcome
• Prima Facie calculations indicate that the management is assuming a sharp turnaround in the current hotspots
• In case a sharp turnaround does not happen, valuations may face some downside
• Value the India business at 25 times March 2022E PE
• Await more details on assumptions undertaken for valuations

HSBC On Household Durables

• Import restriction measures a manageable headwind
• AC import dependence trend set to accelerate in coming years
• Voltas is more import dependent as compared to peers
• Maintain hold rating for Voltas with a price target of Rs 560
• Among other players, import dependence of Havells has reduced

Pledged Share Details

• Ramkrishna Forgings: Promoter Riddhi Portfolio Services released pledge of 1.6 lakh shares on June 29
• Nocil: Promoter Mafatlal Industries released pledge of 13.07 lakh shares on July 2

(As Reported On July 2)

Bulk Deals

• KRBL: Kotak Mahindra International sold 13 lakh shares (0.55%) at Rs 262.03 per share
• Valiant Organics: Promoter Dilesh Airlines sold 69,000 shares (0.57%) at Rs 1,701 per share

Trading Tweaks

• Record Date for Share Buyback: Amrit Corp, Balrampur Chini Mills, Just Dial.
• Record Date for Stock Split: Karda Construction (from Rs 10 to Rs 2).
• Price Band Revised From 10% To 5%: Vertoz Advertising
• Price Band Revised From 20% To 10%: Oriental Aromatics
• Move Into Surveillance Measure Due To High Encumbrance: Dilip Buildcon, Future Lifestyle Fashions, Adani Ports and Special Economic Zone, NCC, Ahluwalia Contracts, JSW Steel.
• Move Out Of Surveillance Measure Due To High Encumbrance: Himachal Futuristic Communications, JSW Energy, Adani Transmission, GMR Infrastructure, Max India, Jindal Stainless, Adani Enterprises, Jagran Prakashan, DB Corp, Torrent Power.
• Move Into ASM Framework: 3i Infotech, Alphageo, Tijaria Polypipes
• Move Into Short-Term ASM Framework: Mayur Uniquoters, Dynemic Products, Hi-Tech Pipes, Manaksia Coated Metals & Industries
• Move Out Of Short-Term ASM Framework: Nahar Poly Films, Astec LifeSciences, Nitin Spinners, JBM Auto, Greenpanel Industries, Kirloskar Industries, Vikas Proppant & Granite.

Insider Trades

• Apollo Tyres: Promoter PTL Enterprises acquired 3.8 lakh shares between June 29-30
• Jamna Auto: Promoter Map Auto acquired 7.26 lakh shares between June 29-30
• Prakash Industries: Promoter Ved Prakaash Agarwal acquired 25,000 shares on June 30

(As Reported On July 2)

Money Market Update

• The rupee ended stronger at 75.03 against the U.S. Dollar on Thursday as compared to Wednesday's close of 75.60.
• This was the biggest single-day gain for the rupee in three months.
• Rupee ended as the best performing Asian currency on Thursday.

F&O Cues

• Nifty July futures closed at 10,540; discount narrows to 11 points from 22 points
• Nifty July futures shed 6.7% and 7.7 lakh shares in Open Interest
• Nifty Bank July futures closed at 21,977; premium of 24 points from discount of 48 points
• Nifty Bank July futures shed 1% and 15,000 shares in Open Interest
• Nifty Put-Call Ratio at 1.61 from 1.43 across all series
• Stocks In F&O Ban: Glenmark, SAIL

Nifty Monthly Expiry: July 9

• Maximum Open Interest on Call side at 11,000 strike (15.5 lakh shares)
• Maximum Open Interest on put side at 10,000 strike (15 lakh shares)
• Active Options: 10,400 Put (+12 lakh shares) and 10,600 Call (+7.5 lakh shares)

Nifty Monthly Expiry: July 30

• Maximum Open Interest on Call side at 11,000 strike (22.2 lakh shares)
• Maximum Open Interest on Put side at 10,000 strike (30.5 lakh shares)