Stocks To Watch: Aurobindo Pharma, BPCL, Concor, DHFL, SCI, Union Bank, Yes Bank, Zee Entertainment  

American equity futures dipped and stocks in Asia opened with a cautious tone after support from the U.S. Congress for Hong Kong protesters set up the potential for further confrontation with China as investors await a trade deal.

S&P 500 futures fell as a person familiar with the matter said President Donald Trump is expected to sign the bill. Japanese and Australian shares slipped along with those in South Korea. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.12 percent to 11,997.50.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

Here are the stocks to watch in today’s trade.

• Essel Group In a second effort to raise funds to pay off debt, Subhash Chandra-led Essel Group, the promoter of Zee Entertainment Enterprises, will sell 16.5 percent shareholding in the media major to financial investors. After this transaction, the promoter stake in Zee Entertainment will stand reduced to 5 percent, said a company statement. Though Chandra’s son Puneet Goenka remains managing director and chief executive officer and his term, that was to end on Dec. 31, recently received in-principle approval from the company board for a five-year extension. It’s not clear if that will change with new investors coming aboard.
• DHFL: The Reserve Bank of India has superseded the board of Dewan Housing Finance Corporation Ltd. and intends to refer the non-bank lender for resolution under the newly introduced insolvency window for financial service providers. The RBI appointed R Subramaniakumar, former managing director and chief executive officer of Indian Overseas Bank, as administrator of DHFL. In a statement issued on Wednesday, the regulator said the decision has been taken in light of governance concerns and defaults at the non-bank lender. The RBI further added that it intends to “shortly initiate the process of resolution of the company.”
• Union Bank of India Divergence Report FY19: Divergence in net non-performing assets stood at Rs 589 crore. Divergence in Provisioning was at Rs 1,587.7 crore. Adjusted PAT for March 31 after taking into account divergence in provisioning was at net loss of Rs 3,978 crore versus the reported net loss of Rs 2,947 crore.
• Oil India commenced seismic survey operation in its Rajasthan Block.
• Aurobindo Pharma: U.S. Food and Drug Administration sent Form 483 observations to the company after conducting inspections last month, according to Bloomberg report.
• Dilip Buildcon has received provisional certificate of completion for HAM Project in Maharashtra. Scheduled completion date was May 28, 2020.
• Great Eastern Shipping has contracted to sell its Crude Carrier Vessel, which will be delivered to new buyer in the third quarter of the current financial year.
• Canara Bank: Ministry of Finance gave in-principle approval to proposed amalgamation of Syndicate Bank into Canara Bank.
• Oriental Bank of Commerce: Ministry of Finance gave in-principle approval to proposed amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank.
• Thomas Cook’s arm completed the acquisition of 51 percent stake in BDC Digiphoto Imaging Solutions.

Cabinet Briefing: Key Highlights

The Cabinet has approved strategic divestment in three listed state-run companies. It will divest:

• Bharat Petroleum: 53.29 percent stake
• Container Corporation of India: 30.8 percent stake, where it owns 54.8 percent stake.
• Shipping Corporation of India: 63.75 percent stake.
• NTPC Ltd. will buy the government’s stake in THDC India Ltd. and North Eastern Electric Power Corporation Ltd.

Telecom Stocks

• Cabinet has also approved deferral of spectrum instalment payments due for years 2020-21 and 2021-22.

Pledge Share Details

• Yes Bank promoter Madhu Kapur released pledge of 1.12 crore shares via release of encumbrance on Nov. 13.
• JSW Energy promoter Glebe Trading created pledge of 68.54 lakh shares from Nov. 14-15.
• Solara Active Pharma Sciences promoter Chayadeep Ventures released pledge of 7.52 lakh on Nov. 18.
• JSW Steel promoters revoked pledge of 1 crore shares on Nov. 14-18.

Trading Tweaks

• Kaveri Seed, JB Chemicals & Pharma ex-date for share buyback.
• Karma Energy, Pokarna to move into short term ASM Framework.
• Vikas EcoTech, JMT Auto, RattanIndia Infrastructure, Phyto Chem to move out of short term ASM Framework.
• Magma Fincorp, Steel Exchange India price band revised to 5 percent.

Who’s Meeting Whom

• M&M Financial Services to meet Valiant Capital, Taiyo Pacific Advisors and other investors from Nov. 21-Dec. 5.
• MCX to meet Arihant Capital Markets, Sixteenth Street Capital and Tokio Marine from Nov. 21-22.
• Welspun Enterprises to meet Kotak Securities on Nov. 21.
• Cholamandalam Investment Finance to meet Jefferies India and B&K Securities from Dec. 3-4.
• Cipla to meet First State Investments and LGM Investment Management from Nov. 21-25.
• Container Corporation of India to meet Dolat Capital, Elara Securities and Neuberger Berman from Nov. 25-Dec. 9.
• IIFL Finance to meet Baillie Gifford, Hermes and other investors from Nov. 21-22.

Insider Trading

• Aarti Industries promoters sold 1.25 lakh shares from Sept. 27-Nov. 19.
• Filatex India promoter Azimuth Investments acquired 2 lakh shares on Nov. 18.
• Shakti Pumps promoter Dinesh Patidar acquired 5,75,000 shares from Nov. 18-19.
• J Kumar Infraprojects promoters acquired 3 lakh shares from Nov. 19-20.

Money Market Update

• The rupee closed at 71.82/$ versus 71.72/$ on Tuesday.

Index Futures

• Nifty November futures closed at 12,018, premium of 19 points Vs 29 points
• Nifty November Futures open interest down 4 percent sheds 6.6 lakh shares in open interest
• Nifty Bank November futures closed at 31,321, discount of 32 points Vs premium of 23.4 points
• Nifty Bank November futures series open interest down 3 percent, sheds 60k shares in open interest

Options

• Nifty PCR at 1.58 versus1.45 (across all series).

Nifty Weekly Expiry: Nov. 21

• Max open interest on call side at 12,000 (20.3 lakh shares).
• Max open interest on put side at 11,900 (22.7 lakh shares).
• Open interest addition seen at 12,000P (+8.6 lakh shares) 11,950P (+7.3 lakh shares).
• Open interest shedding seen at 11900C (-7.5 lakh shares).

Nifty Monthly Expiry: Nov. 28

• Max open interest on call side at 12,000 (24.5 lakh shares).
• Max open interest on put side at 11,900 (24.4 lakh shares).

Brokerage Radar

Morgan Stanley on BPCL

• Maintained ‘Overweight’ with a price target of Rs 571.
• Cabinet approved divestment of BPCL to a strategic investor along with management control.
• Stake sale to a non-SOE could re-rate sector multiples, improve marketing margins and drive cost efficiencies for OMCs in medium term.

Morgan Stanley on Shriram Transport

• Maintained ‘Overweight’ with a price target of Rs 1,365.
• New vehicle demand affected by overcapacity created by change in axle load norms and slowdown.
• NIMs to remain stable in range of 7.2-7.3 percent; funding availability and cost are improving.
• Credit costs are expected to be in the 200-220 basis points band.

Morgan Stanley on Indian Telecom

• Government approves two-year moratorium on spectrum payments.
• Move is cash flow positive for all the telcos but provides much-needed relief to Vodafone Idea.
• Telcos still have to pay remaining spectrum dues for 2019-20 which could be a drag on cash balances.

On Zee Entertainment

IDFC Securities

• Maintained ‘Outperform’ with a price target of Rs 416.
• Issues around pledged shares addressed.
• Zee promoters to continue to run the company.
• Believe market should start re-pricing the company for its strong fundamentals.

Morgan Stanley

• Upgraded to ‘Equal-weight’ from ‘Underweight’; hiked price target to Rs 340 from Rs 248.
• Overhang of pledged stake diminishing.
• Large portion of the promoter debt issue could be resolved with recent stake sale.
• Investors will start monitoring financial and operational performance of the business.