Sensex, Nifty End Seesaw Session Flat As RIL Offsets Rally In I.T. Stocks

India's stock benchmarks closed the penultimate trading session little changed, as gains in information technology stocks were offset by losses in energy, oil & gas and metal stocks, with index heavyweight Reliance Industries Ltd. shedding little less than 2%. Trading volumes were thin in a rangebound session on monthly F&O expiry day.

The S&P BSE Sensex was largely unchanged at 57,794. The 30-stock index rose above 58,000 level in intraday trade before erasing the gains. The NSE Nifty 50 also closed little changed at 17,203.95. Bajaj Auto Ltd. had the largest drop, falling 1.9%. Today, 27 of 50 shares fell, while 22 rose.

The S&P BSE MidCap underperformed, as it shed 0.2% while the S&P BSE SmallCap outperformed its larger peers as it added 0.2%. Twelve of the 19 sectoral indices compiled by the BSE Ltd. declined with S&P BSE Energy declining over 1.6%. On the flipside, S&P BSE Information Technology rose nearly 1%.

The market breadth was skewed in the favour of bulls. About 1,853 stocks advanced, 1,508 declined and 99 remained unchanged.

"It has been quite a volatile month for Nifty, wherein Nifty fell to a low of 16,400 at the same time has also seen a high of 17,600. Currently, it looks like Nifty is going to end 1-1.5% up for the month of December. FIIs have sold equities worth almost $2.7 billion in the month of December. This is the 3rd consecutive month wherein FIIs would be the net sellers. Overall, FIIs continue to be the net sellers for the entire year 2021", Rahul Gupta, AVP-Derivative Sales, Institutional Equity, Emkay Global Financial Services wrote in a note and added "going forward the key technical level to watch out for Nifty would be 17,600; a break of 17,600 will ensure a fresh rally and a break of 16,800 will ensure a fresh selling in the market. So as of now, Nifty looks to be in a range of 16,800-17,600".

Bharat Forge Ltd. has announced a voluntary retirement scheme for its permanent eligible employees who have attained 40 years of age and have completed 10 years of service with the company.

The scheme pertains to only employees at the company's Mundhwa and Satara plants.

Source: Exchange Filing

Shares of NTPC Ltd. rose 3.57%, the biggest intraday gain in over four weeks, to Rs 127.55 apiece.

• The rise comes amid reports that India's largest electricity producer is seeking a strategic investor in its renewables business ahead of taking the renewables unit public in 2022.

• According to a Bloomberg exclusive on Wednesday, NTPC Renewable Energy Ltd. intends to conduct international roadshows from April 2022 to find a partner and is hoping that an investor will boost the value of the IPO, citing an official who asked not to be identified.

• Of the 28 analysts tracking the company, 25 maintained 'buy' and three maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 33.9%.

Distributors to stores are likely to stop supplying Hindustan Unilever Ltd.'s products in Maharashtra from January 1, as they seek price parity between physical and online retailers, according to Edelweiss Securities.

• Hindustan Unilever and its distributors are expected to reach an agreement on the issue soon: Edelweiss

• Distributors to online retailers are unlikely to be adversely impacted.

• HCL Technologies rises for the eighth consecutive session.

• Alkem Laboratories on track for the longest winning streak in two years. Stock advances for the eighth session in a row

• Nippon Life India AM's shares rise for the eight consecutive session, on track for the longest winning steak in 2.5 years.

Source: Bloomberg

Kalpataru Power Transmission Ltd. will consider a proposal to raise funds by way of issuance of non-convertible debentures on private placement bassis on January 4, the company said in an exchange filing.

Shares of Sharda Cropchem Ltd. rose over 5.6% in intraday trade after Anand Rathi initiated coverage on the stock with a 'buy' recommendation.

Anand Rathi

• Initiates coverage on the stock with 'buy', target price set at Rs 480; an implied return of 35%.

• Focus on registering formulations and active ingredients to drive company's growth.

• Identification of off-patent high-demand molecules and strong financials are key growth drivers.

• Estimates revenue from new and existing registrations to post 16.6% CAGR over FY22-24.

• Estimates 16% revenue CAGR over FY22-24 in agrochemicals business.

• Estimates 10% revenue CAGR over FY22-24 in non-agro chemicals business.

• Expects an average EBITDA margin of 18.6% over FY22-24.

• Expects the return ratios to improve supported by topline growth and stable margins.

• Company is trading at the lower end of its historical P/E multiples.

• Key Risks: Forex movements, dependency on China for raw materials and delay in registrations.

Source: Exchange Filing, Bloomberg, Anand Rathi note.

Nitin Spinners Ltd. has approved a capital expenditure of Rs 950 crore on capacity expansion.

• In an exchange filing, the company said it planned to add 1.51 lakh equivalent spindles to its current capacity of 3.32 lakh spindles in spinning.

• Likewise, capacity addition has been planned in knitted fabrics and woven fabrics segments. The company intends to add the proposed capacity within 20 months.

• The capacity addition will be financed by term debt and internal accruals. and it is being done to meet the demand, widen product portfolio and to bring competitive cost advantage.

Source: Exchange Filing

Shares of Alkem Laboratories Ltd. rose over 6.5%, the biggest intraday gain in over a month, to Rs 3,748.95 apiece.

• Trading volume was 29% above the 20-day average volume, for this time of the day.

• Shares of Alkem Labs have risen for the eighth consecutive session, with today's gains.

• Analysts have 16 'buy', five 'hold' and one 'sell' recommendations on the stock. The overall consensus price of analysts tracked by Bloomberg implied an upside of 12.4%.

• RBI extends deadline for restrictions against non-KYC compliant accounts to March 31, 2022 from December 31, 2021.

• RBI cites uncertainty due to new Covid variant in extension of deadline.

• In a May 2021 notification, RBI had asked banks not to take action against non-KYC compliant accounts till end of December. Following which banks would have been free to take action including freezing of accounts.

Source: RBI Notification

India's stock benchmarks advanced, aided by gains in information technology stocks, ahead of December series F&O expiry, amid rising concerns over the rapid spread of covid-19 cases due to omicron variant, across the world.

The S&P BSE Sensex rose 0.19% to 57,915.86. The NSE Nifty 50 index also rose by similar magnitude to 17,237.50.

The S&P BSE MidCap index underperformed its larger peers as it fell 0.4% while the S&P BSE Smallcap rose 0.34% and mirrored the Sensex and Nifty. Thirteen of the 19 sectoral indices compiled by the BSE Ltd. declined with S&P BSE Oil & Gas index shedding nearly 1%. On the flipside, S&P BSE Information Technology rose 1.3%.

The market breadth was skewed in the favour of bulls. About 1,879 stocks advance, 1,396 declined and 106 remained unchanged.

Indian bond yields edged higher, tracking an overnight gain in U.S. yields and crude oil prices. The rupee rose in line with other emerging-Asian currencies.

• 10-year yields up 2bps to 6.48%. Yields are up 15bps this month.

• RBI to hold Rs 2 lakh crore 4-day reverse repo auction on Thursday.

• USD/INR fell 0.2% to 74.5775.

Source: Bloomberg

Shares of Deep Industries Ltd. rose over 12% in intraday trade to Rs 162.8 apiece after the company received a letter of award from GSPC LNG Ltd. worth Rs 44.4 crore.

The order pertained to the hiring of gas compression services at GSPC LNG Terminal, Mundra, Gujarat for a period of five years.

• Domestic traffic has rebounded strongly in the months of November and December.

• Omicron has caused future bookings to soften, but remains well above September levels.

• Emerging from the covid crisis structurally stronger

Most yields along the India sovereign yield curve rose, with 14-year bonds moving the most in Thursday morning trading.

• The 5-year yield rose 1.7bps to 5.823%

• The 10-year yield rose 1.8bps to 6.479%

• The 20-year yield remained unchanged at 6.914%

• The 5-year-10-year yield spread was 65.6bps, vs previous close 65.5bps

Shares of Delta Corp Ltd. shed over 4% in intraday trade to Rs 252.65 apiece after Goa government announced new restrictions to limit the spread of omicron strain of covid-19 infection.

• Casinos, cinema halls , auditoriums, water parks have been directed to operate at 50% capacity.

• Delta Corp runs at least four casinos in Goa, according to the company website.

Shares of Rallis India Ltd. rose as much as 3.2% to Rs 275.95 apiece after Anand Rathi initiated coverage on the stock with 'buy' recommendation. The price target has been set at Rs 350; an implied return of 31%.

Here are the views of the brokerage on the agrochemical producer Rallis India.

Anand Rathi

• Initiates coverage on the stock with 'buy' recommendation; price target set at Rs 350, an implied return of 31%.

• Confident of company's long-term prospects as capex plans, focus on product launches, rise in export market-share and free cash flows, expansion in return ratios and strong balance sheet augur well.

• Expects revenue/profit to clock 12%/22% CAGRs over FY22-24.

• Expects growth momentum to continue in international crop-protection business; CAGR in international crop care business likely to be 15% over FY22-24.

• Company's focus in developing products to reduce the dependence of kharif crops to drive growth.

• Seeds business revenue likely to rise by 7% CAGR over FY22-24.

Key Risks:

• Failure to diversify to a non-kharif range of seeds,

• Greater use of illegal herbicide-tolerant cotton seeds,

• Monsoon dependence,

• Delay in launching products and slowdown in R&D.

Of the 21 analysts tracking the company, 11 maintained 'buy', six maintained 'hold' and four maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 11%.

RBL Bank interim MD & CEO Rajeev Ahuja gets RBI approval.

• Approval for a period of three months with effect from December 25, 2021 or till the appointment of a regular MD & CEO, whichever is earlier.

Source: Exchange Notification

Shares of RBL Bank shed nearly 7% to Rs 134.3 apiece.

• This is the steepest intraday decline since Monday when the shares fell 25% after RBI's sudden intervention.

• Report by Livemint suggested that RBI intervention was due to Rs 300 crore loan written off by RBL bank within seven months of being sanctioned.

• Of the 25 analysts tracking the company, 11 maintained 'buy', eight maintained 'hold' and six maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 51.7%.

Shares of BSE Ltd. fell as much as 2.74%, the steepest intraday decline in seven sessions, to Rs 1,900.15 apiece, after Investec downgraded the stock to 'sell' from 'hold' rating.

Investec

• Downgrades stock to 'sell' from 'hold' with the target price raised to Rs 1,720 from Rs 1,055; an implied return of -9.7%.

• Expects the strong primary capital raise and secondary market transactions seen in 2021 to cyclically moderate, especially in the small/micro-cap space.

• Expects a sequential decline in earnings for BSE in FY23e.

• BSE is currently trading at a significant premium to global peers, making current valuations untenable.

Source: Exchange Filing, Bloomberg, Investec note

• HCL America, a wholly-owned step-down subsidiary of HCL Technologies Ltd., has acquired the balance 19.6% stake in HCL Technologies SEP Holdings.

• HCL Technologies SEP Holdings is the sole parent entity of Actian Corporation. HCL already owns 80.4% stake in HCL Technologies SEP Holdings.

• The cost of acquisition is $100.2 million. The acquired entity is involved in data management, integration and analytics products and services.

Source: Exchange Filing, Bloomberg

Shares of Firstsource Solutions Ltd. rose over 2% in intraday trade to Rs 186.25 apiece after the company announced that it entered into an agreement to acquire American Recovery Services.

• American Recovery Services is a legal collections network headquartered in Southern California.

• Acquisition is likely to enhance Firstsource's leadership in consumer debt management services.

Of the nine analysts tracking the company, seven maintained 'buy' and two maintained 'hold' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 19%.

Shares of Kalpataru Power Transmission Ltd. rose nearly 6%, the biggest intraday gain in three months, to Rs 377.8 apiece after the company secured orders worth Rs 1,560 crore.

• The global EPC player secured orders from India, Africa, CIS and South America in the power transmission business.

• The company's international subsidiary also secured new power transmission projects in Europe

Of the 18 analysts tracking the company, 16 maintained 'buy' and two maintained 'hold' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 44%.

India's stock benchmarks opened the penultimate day of 2021 lower, dragged by losses in banking stocks, amid rising concerns and curbs due to surge in covid-19 cases due to omicron strain, across the world.

The S&P BSE Sensex fell 0.3% to 57,580. The NSE Nifty 50 index also declined by similar magnitude to 17,150.35.

The broader markets outperformed their larger peers with S&P BSE MidCap and S&P BSE SmallCap adding 0.2%. Ten of the 19 sectoral indices compiled by the BSE Ltd. advanced with S&P BSE Metal leading the gains.

The market breadth was skewed in the favour of the bulls. About 1,641 stocks advanced, 793 declined and 73 remained unchanged.

• Kalpataru Power Transmission Ltd. has bagged new orders worth Rs 1,560 crore.

• The global EPC player secured orders from India, Africa, CIS and South America in the power transmission business.

• The company's international subsidiary also secured new power transmission projects in Europe

Source: Exchange Filing

• Balkrishna Industries: LKP Shares and Securities Ltd. initiated coverage of the stock with a recommendation of 'buy'; price target set at Rs 2,707, implied return of 20%.

Source: Bloomberg

A sudden intervention by RBI in RBL Bank is due to a Rs 300 crore loan that was written off within seven months of being sanctioned, according to Mint newspaper, citing two people directly aware of the matter.

• RBL Bank made the loan to a company as part of a consortium of lenders in 2018 and RBI has been seeking details about the bank's loan portfolio for the past few months: Mint

Shapoorji Pallonji group-promoted Evangelos Ventures last week raised Rs 750 crore by selling bonds to Ares SSG Capital and Farallon Capital affiliate companies, Economic Times newspaper reported, citing unnamed people.

• Shares of Sterling Investment Corp, which has a 9.18% stake in Tata Sons, pledged to raise funds.

• Bonds are due on March 31, 2025, and provide a yield of more than 15%.

The government is likely to unveil revised draft of e-commerce policy and rules that will provide comprehensive guidelines for all online transactions, Economic Times newspaper reported, citing people aware of the matter.

• The two drafts will be released at the same time and will be in sync with each other. That will offer greater clarity to the industry and reduce scope for misunderstanding.

• Holistic guidelines to cover all online companies operating in India.

Indian bond traders will await any possible announcement of an operation twist by the central bank to cap rising yields. Rupee may open higher along with emerging market peers.

• RBI to hold Rs 2 lakh crore 4-day reverse repo auction on Thursday.

• USD/INR rose 0.1% to 74.7375 on Wednesday.

• 10-year yields fell 2bps to 6.46% on Wednesday; still yields are up 14bps this month.

• Global funds sell net Rs 975 crore of India stocks Wednesday: NSE.

  • They bought Rs 150 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 870 crore of corporate debt.

• State-run banks bought Rs 385 crore of sovereign bonds on Dec. 29: CCIL data. Foreign banks bought Rs 134 crore of bonds.

Source: Bloomberg