Stocks To Watch: Aurobindo Pharma, DHFL, L&T Tech, Lupin, Tata Motors 

Stocks opened mixed in Asia as discussions between the Donald Trump administration and Mexican officials on tariffs ended without an agreement on Wednesday.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 12,040.50 as of 6:55 a.m.

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Stocks To Watch

• DHFL Ltd.’s commercial papers were downgraded to ‘D’ (Default) by CRISIL and ICRA owing to liquidity concerns. This comes a day after the non-bank lender delayed interest payments to investors.
• Aurobindo Pharma Ltd. said it had received Form 483 with ten observations from U.S. FDA for its formulation manufacturing facility in Hyderabad. In the press release, the pharma company also stated that these observations are repetitive and procedural in nature. The Form 483 will not have an impact on existing business of this facility. This release was made as a clarification to the exchanges.
• Lupin Ltd.: Japan’s PMDA completed inspection of its Mandideep facility with no critical or major observations. The inspection was conducted between May 14-19.
• Vedanta Ltd.: A hearing on the liquidation of Vedanta’s Zambian unit, Konkola Copper Mines, has been postponed to June 11, according to court documents, even as President Edgar Lungu said the India-based investor will be forced out. (Bloomberg News)
• ICICI Bank Ltd. clarified on Fitch’s downgrade and said that all ratings for the bank were unsolicited. The release also states that the issuer did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure. Thus, the event was not reported to exchanges.
• Natco Pharma filed ANDA with the U.S. FDA for generic version of Bosentan tablets (Tracleer) for the U.S. market.
• Muthoot Capital Services Ltd. completed securitisation of Rs 140.4 crore on May 31.
• Cimmco Ltd.: Promoter Titagarh Wagons said it plans to sell 4.49 percent stake in the company at Rs 29 per share aggregating to Rs 3.6 crore.
• Omax Autos Ltd.: The company’s Speedomax unit in Haryana received closure notice from concerned authorities, subject to necessary regulatory compliance, and such units are expected to be closed within sixty days.
• GMR Infrastructure’s subsidiary GMR Warora Energy Ltd. was downgraded by CARE to D for bank facilities and C for NCDs due to delay in servicing debt. Power Distribution Companies have been delaying payment of normal and regulatory dues to GWEL against energy supplied which had led accumulation of receivables with total receivables exceeding 5 months of turnover.
• India Cements promoter released pledge on 24.5 lakh shares (0.79 percent).
• State Bank of India: NCLT approved merger of SBI Business Process Management Services and SBI Cards Payment Services.
• Tata Motors: JLR and BMW announce collaboration for next generation electrification technology. Collaboration seeks to advance development of electrification technology to support transition to autonomous, connected, electric, shared future. Joint investment in research & development, engineering and procurement will provide the necessary economies of scale to support increased consumer adoption of electric vehicles.
• HEG Ltd. to increase stake in Bhilwara Energy Ltd. from 29.48 percent to 49 percent.
• PSP Projects Ltd. received new work order worth Rs 155.6 crore so far during FY20.
• Hathway Cable & Datacom Ltd.’s credir rating upgraded to ‘IND AAA’ from ‘IND A-’ by India Ratings.

Bulk Deals

Mahindra Logistics

• Kotak Funds acquired 30.15 lakh shares (4.22 percent) at Rs 490 each.
• Goldman Sachs acquired 6.1 lakh shares (0.85 percent) at Rs 490 each.
• Reliance Capital acquired 4.25 lakh shares (0.59 percent) at Rs 490 each.
• Normandy Holdings sold 64.15 lakh shares (8.98 percent) at Rs 490.2 each.

NCL Industries

• Promoter NCL Holdings sold 2.56 lakh shares (0.57 percent) at Rs 147 each.

Pledge Share Details

• Zuari Agro Chemicals revoked pledge of 15.6 lakh shares on May 31.
• JSW Steel promoter HSW Techno Projects Management revoked pledge of 18.18 lakh shares on May 30.
• Future Retail promoter Future Corporate Resources revoked pledge of 32.65 lakh shares on May 31.
• Gati promoter Mahender Kumar Agarwal & Sons invoked pledge of 47,000 shares on May 30.

Trading Tweaks

• GeeCee Ventures, FDC ex-date for share buyback.
• Multibase India to move into short term ASM Framework.
• Avadh Sugar & Energy to move out of short term ASM Framework.
• Tata Teleservices (Maharashtra) price band revised to 5 percent.

Who’s Meeting Whom

• Mahindra Lifespace Developers to meet Dolat Capital and Carnelian Capital on June 6.
• KEC International to meet UBS Securities on June 6.
• Mahindra & Mahindra to meet Abu Dhabi Investment Authority, Sumitomo Mitsui and other investors from June 10-12.

Insider Trading

• JSW Steel promoter Beautifield Holdings sold 41.7 lakh shares from May 29-30.
• LT Foods promoter group acquired 33,000 shares on June 3.
• Thyrocare Technologies promoter group A. Velumani HUF acquired 25,000 shares on May 22.
• Texmaco Infra & Holdings promoter group Adventz Finance acquired 2.5 lakh shares on May 30.

Money Market Update

• The rupee closed at 69.26/$ on Tuesday compared to Monday’s 69.26/$.

F&O Cues

June Futures

• Nifty futures closed at 12,056, premium of 34 points Vs 16 points
• Nifty Futures open interest down 2.6 percent, sheds 5 lakh shares in open interest
• Bank Nifty futures closed at 31,640.6, premium of 51 points Vs 26 points
• Bank Nifty futures open interest up 3 percent, adds 65,000 shares in open interest

Options

• Nifty PCR at 1.53 Vs 1.75 (across all series)

Nifty Weekly Expiry 6 June

• Max open interest call side at 12,200 (19 lakh shares), 12,100 (18.2 lakh shares)
• Max open interest on put side at 11,900 (18.4 lakh shares), 12,000 (17.8 lakh shares)
• open interest addition seen at 12,200P (+6.4 lakh shares), 12,050 C (+4.7 lakh shares)
• open interest shedding seen at 12,000P (-8 lakh shares), 11,900 P (-6.7 lakh shares)

Nifty Monthly Expiry 27 June

• Max open interest on call side at 12,500 (19.4 lakh shares)
• Max open interest on put side at 11,500 (26 lakh shares)

Stocks In F&O Ban

• IDBI Bank

Brokerage Radar

CLSA on Eicher Motors

• Maintained ‘Outperform’ with target price of Rs 22,500.
• A new network expansion strategy for smaller markets.
• Improved R&D and product development capabilities.
• Focused on enhancing its brand and not too perturbed by competition.
• Remains optimistic on overseas markets although ramp-up gradual.

CLSA on Adani Ports

• Maintained ‘Buy’; hiked target price to Rs 510 from Rs 475.
• A large buy-back and a better pay-out policy.
• Buy-back to boost return on equity; cut EPS estimates but better earnings quality.
• Good guidance for FY20 on a high base.

CLSA on Dr. Reddy’s

• Maintained ‘Buy’ with target price of Rs 3,330.
• Strong FCF generation along with delivery on cost controls.
• Streamlining of manpower in front-end markets.
• Strengthening presence in emerging markets, selectively focused on the U.S.