Stock Market Investment Shot, 8th August 2022

In the first four months of FY23 viz. between April 2022 and July 2022, SEBI approved 28 IPOs slated to raise funds worth Rs45,000 crore. Till date, FY23 has seen 11 IPOs raising Rs33,000 crore between them.
This list was dominated by LIC followed by Delhivery. Companies getting SEBI clearance include names like Fabindia, Bharat FIH, TVS Supply Chain Solutions, Aadhar Housing Finance, Macleods Pharma etc.
The launch dates are yet to be announced and the only IPO announced is Syrma SGS, opening on 12th August.

Berkshire Hathaway reported a net loss of $43 billion in the June 2022 quarter, due to a $53 billion write off, since Berkshire reports profits and losses on MTM basis each quarter. However, the company has been extremely aggressive in buying the dip with purchases of $3.8 billion in the quarter. It made an operating profit of nearly $10 billion on its insurance and railroad business. However, Buffett reduced the stock buyback to just $1 billion in the June quarter compared to $7 billion on average in previous
quarters.

The 3 OMCs viz. IOCL, BPCL and HPCL reported a combined net loss of Rs18,480 crore in the June 2022 quarter due to negative marketing margins. This was due to holding petrol and diesel prices at below the landed cost of oil. While all the downstream oil companies reported robust gross refining margins (GRMs), that was more than offset by negative marketing margins. This resulted in losses for the 3 oil companies. HPCL and BPCL accounted for 90% of these losses due to a predominance of oil marketing.

Foreign portfolio investors (FPIs) were net investors of Rs14,000 crore in equities in the first week of August 2022. Only in June, the FPIs had turned net buyers for the month after 9 months of persistent selling, in which FPIs offloaded equities worth $35 billion. India has shown an uncanny ability to sustain growth even as consumer inflation is trending lower. The bottoming of the rupee around 80/$ levels also helped. However, analysts caution that FPIs may still wait for greater clarity on the current account deficit.

For the week ended 05th August, 8 out of the 10 most valuable companies on the NSE added Rs98,235 crore in market cap. The surge was led by IT majors even as the benchmark indices closed 1.4% higher for the week. Among major gainers in the week, Infosys added Rs28,170 crore and TCS Rs23,583 crore. Other key contributor were Reliance Rs17,048 crore, ICICI Bank Rs13,861, LIC Rs6,009, Bajaj Finance Rs5,709 crore and SBI Rs2,187 crore. HDFC and HDFC Bank twins lost Rs9,000 crore in market cap
between them.

Nykaa expects stronger demand for its products in the current quarter as the impact of higher inflation gradually tapers. That had dented consumer spending. Nykaa also expects that the upcoming festival season should boost consumer demand; especially for the beauty, personal care and wellness products. For the June quarter, Nykaa had reported 47% growth in gross merchandise value (GMV) at Rs2,156 crore. Nykaa, backed by TPG, dominates domestic online beauty and personal care space with 30%
market share.

M&M reported demand for cars outstripping production as people made a beeline for its latest SUV. For the June quarter, M&M reported 74% growth in PV sales at 149,803 units combined with open bookings of 273,000 units. M&M admitted that, while capacity expansion program was on, they had not expected such a robust demand pick-up. The Scorpio-N SUV had received 1 lakh orders in 30 minutes resulting in Rs18,000 crore of sales. Due to limited capacity of just 6,000 units currently, the waiting time will be
huge.

Petronet LNG, India’s leading gas importer, has postponed plans for a 1 million tonnes per annum (MTPA) liquefied natural gas (LNG) import deal. This was on the back of a sharp spike in global prices.
Petronet is currently in talks with Qatar authorities for extension of its 7.5 MTPA long-term LNG deal. Petronet LNG has been looking for a 1 MTPA deal for small industrial users. The company expects the LNG prices to ease in the next year as the Russia-Ukraine crisis abates. Additional Russian supplies could come towards Asia.