Stock Market Investment Shot, 12th August 2022

On Thursday, Nifty gained 124 points to 17,659 while the Sensex gained 515 points to 59,332 on buying from global institutions. Now indices have bounced 13% from their yearly lows and are just 5% short of their life-time highs. Markets got a boost from US consumer inflation coming in 60 bps lower at 8.5% as well as flat MOM inflation. This raised the hope that the Fed could be more tempered in its rate action going ahead. Now investors are more confident of a soft landing in the US and that helped Indian
markets.

Adani Group will invest Rs57,575 crore in Odisha to set up 2 projects viz. a 4 MMTPA Integrated Alumina Refinery and a 30 MMTPA Iron Ore (Value Addition) Project. The capital investment of Rs 57,575 crore is likely to create 9,300 direct jobs plus thousands of indirect opportunities. The alumina refinery will be set up in the vicinity of potential bauxite reserves to produce smelter grade alumina. The iron ore project will consist of iron ore concentrate, slurry pipeline, filtration and pellet plant to produce filter
cake and pellets.

The stock of ICICI Bank hit a record high of Rs865.55 on Thursday, even as its market cap crossed the Rs6 trillion mark for the first time ever. ICICI Bank is India’s second most valuable bank by market cap. It ranks sixth in the overall value rankings in India. For Q1FY23, ICICI Bank had reported 49.5% rise in net profits at Rs6,905 crore on the back of healthy NIMs and lower gross NPAs. Most analysts see further scope for margin expansion on improving C/D ratio. Most analyst targets for ICICI Bank veer around the
Rs900 mark.

Aditya Birla Health Insurance has approved capital infusion of Rs665 crore from a unit of sovereign fund, Abu Dhabi Investment Authority (ADIA). The insurer is a 51:49 joint venture between Aditya Birla Capital and Momentum Metropolitan Strategic Investments of South Africa. Post the transaction, ADIA will hold 9.99 per cent stake in Aditya Birla Health Insurance. The deal values the health insurer at Rs56,650 crore
on a standalone basis. Aditya Birla is one of the 5 standalone health insurers in non-life insurance space.

Balaji Specialty Chemicals, a subsidiary of Balaji Amines, has filed draft red herring prospectus (DRHP) with SEBI for its proposed IPO. The offer will comprise of a fresh issue of shares of Rs250 crore and an offer for sale (OFS) of 2.6 crore shares by existing shareholders of the company. The parent company, Balaji Amines Ltd, will not be participating in the proposed offer. The draft papers had been filed with SEBI on August 10. It manufactures niche chemicals like ethylene diamine (EDA), piperazine anhydrous
(PIP) and others.

Eicher Motors stock jumped 3.3% on Thursday to touch a life-time high of Rs3,261 on the back of strong earnings in the June 2022 quarter. It had reported 157% surge in net profits in Q1FY23 to Rs610.66 crore while total income grew 64.4% to Rs3,446 crore. The stock is up nearly 51% from its March lows against a 6.5% rise in the index. Most of the business lines of Eicher have done well with the VECV venture putting out record sales numbers. Exports will be one of the key growth drivers for Eicher over the medium term.

Even as the dollar has weakened substantially, questions remain about the health of renewable energy companies, which had been among the biggest borrowers of dollar loans in recent times. However, smart hedging strategies, stronger credit profiles and parent company guarantees are likely to limit any impact on these companies. This is based on Fitch’s analysis of 11 dollar debt issuances worth $5 billion including companies like Adani Green, JSW Hydro and ReNew Power. While coupon payments are fully hedged, the balloon payments will only materialize from 2024 onwards. In 70% cases, even principal is fully hedged.

Bharti Airtel launched Wynk Studio, a web platform to help Indian and global artistes monetise their music on multiple platforms. It will monetize Wynk to generate higher income from its digital properties. In the revenue sharing deal, artistes will get paid 70% of each stream on any platform. Wynk Studio will launch 5,000 independent artistes on the platform by 2023 with over 130 artistes already signed and streaming on the platform. Bharti Airtel looks to boost its listener base from 75 million to 100 million by next year.