Sensex Trades Apartment; Tata Steel, Maruti and HDFC Bank among the big losers

The Nikkei fell 1.1% while the Shanghai Composite plunged 2%. The Hang Seng is trading down 0.4%.

In US stock markets, Wall Street indices fell sharply on Monday, with the Nasdaq Composite confirming it was in a bear market as the prospect of a ban on oil imports from Russia sent prices soaring crude and fueling concerns about rising inflation.

The Dow Jones Industrial Average fell 2.3% while the Nasdaq was the worst loser and fell 3.6%.

At home, Indian stock markets are trading on a negative note.

Benchmarks opened in negative territory on weak sentiment across the globe.

Market participants are watching Dish TV’s share price as the market regulator has asked the satellite TV broadcaster to disclose the results of its general meeting held in December last year within 24 hours.

The BSE Sensex is down 46 points. Meanwhile, the NSE Nifty is trading down 27 points.

NTPC and TCS are among the top gainers today. Hindalco, on the other hand, is among the big losers today.

The BSE Mid Cap index is up 0.8%. The BSE Small Cap Index is trading up 1.2%.

Sector indices are trading mixed, with stocks from the metals, automotive and banking sectors seeing most of the selling.

Energy stocks and computer stocks, on the other hand, are trading in green.

Shares of Power Grid and GMDC hit their highest level in 52 weeks today.

The price of gold fell 0.1% to 53,492 for 10 grams.

Meanwhile, silver prices are trading up 0.1% to 70,039 per kg.

In news from the currency space, the Rupee is trading at 77.02 against the US Dollar.

Yesterday, the Rupee fell 84 paise to close at an all-time low of 77.01 against the US Dollar as heightened geopolitical risks from the Russia-Ukraine conflict pushed investors into safe-haven assets.

Speaking of rupees, ace chartist at Equitymaster and editor of Quick Profits Report Brijesh Bhatia has shared an insightful update on the Rupee on his telegram channel.

According to Brijesh, the depreciated rupee will be the benefits for the IT sector and this could increase Nifty.

Here is what Brijesh shared:

The Indian Rupee depreciated to an all-time low of 77.14 against the Dollar yesterday.

Since its pandemic low of 77.0080, it has consolidated in the 72-77 range for 23 months; finally it breaks the range.

I made a video last year indicating that the rupee would head towards 80 against the dollar.

Historically, the depreciation of the rupee has hurt Indian equities in the short term, but they tend to go together in the long term (percentage up and down may differ).

As Nifty has fallen from 18,600 to ~15,700, can the depreciating rupee be a final nail in the bears’ coffins?

Moreover, the depreciation of the Rupee will be a benefit for the IT sector and could increase Nifty. The IT sector weighs ~18% in Nifty, which could trigger the reversal in the coming weeks.

Smart investors by the thousands have already joined Brijesh’s telegram channel – Fast Profits.

If you are interested in being part of Brijesh’s mapping journey as he shares how to build wealth from the profitable business setup, we highly recommend joining his channel.

In the latest developments in the IPO space, Sachin Bansal’s Navi Technologies is set to file its draft documents with the market regulator this week for a 40 billion initial public offering (IPO).

The company plans to launch its IPO in June, according to current plans. Bansal, which started Flipkart in 2007 and left the company after the deal with Walmart in 2018, owns 97% of the company.

The public issue will be carried out entirely by issuing new shares, with no component of an offer for sale (OFS).

This means that Bansal will not sell shares to investors in the planned IPO. Besides him, Ankit Agarwal, co-founder and chief financial officer of Navi, and Paresh Sukhtankar, former deputy managing director of HDFC Bank, hold stakes in the Bengaluru-based company.

Bansal, who invested 40 billion of its own capital in Navi, expected to retain majority control of the company even after the IPO.

Navi Technologies became profitable in fiscal year 2020-21 with consolidated profits of 710 m. The company also saw its revenue increase as its revenue reached nearly 7.8 billion 2.2 billion last year.

According to sources, Navi is tapping public markets to fuel its fast-growing personal lending and microfinance business, in addition to its own mutual fund business.

As Navi seeks to increase 40 billion in the IPO, it will also seek to raise at least double that amount through public debt later this year for its aggressive growth plans, which involve building a portfolio of loans a value of 200 billion over the next two years.

The company has drawn up plans to increase up to 150 billion in public market debt over the next two years.

Navi’s current loan portfolio is close to 36 billion in size. This includes home loans, personal loans and microfinance loans.

Note that the above IPO plans come at a time when new-age listed companies in India are under pressure and eroding shareholder value. Even Life Insurance Corporation had filed for an IPO, but the Ukrainian-Russian crisis has suspended India’s biggest problem.

Internet startups such as Delhivery and PharmEasy have won regulator approval for their IPOs, but are now unlikely to launch due to market conditions.

It remains to be seen how this upcoming IPO will pan out.

On to the stock-specific news…

ONGC is one of the hottest stocks today.

State-owned oil and gas producer ONGC could weigh swap options such as crude oil against dividends to be received from its hydrocarbon blocks in Russia outside of other negotiations if the Ukraine crisis persists for a longer period .

However, the sustainability of these oil and gas blocks is a bigger concern as major foreign explorers, many of whom are ONGC partners, are exiting the assets, company sources say.

While Russia faces sanctions from the United States and its Western allies for invading Ukraine, the biggest casualty has been crude oil. Brent crude oil prices crossed the US$100/barrel mark on February 27 and are now hovering around US$130/barrel.

Rising crude oil prices are a plus for ONGC. The immediate concern, however, is that since Russian banks are blocked from the SWIFT facility, the company could face issues regarding the repatriation of dividends.

In fiscal year 2021, ONGC received 15.9 billion dividend from its subsidiary ONGC Videsh for its JSC Vankorneft asset against 4 billion in fiscal year 2020.

The NGO also holds a 26% stake in the Vankorneft field, from which it obtains a dividend. The company also owns Imperial Energy, however, operations here are limited.

The ONGC stock price is currently trading down 1.3%.

Speaking of ONGC, take a look at the chart below to see how the company has fared on the stock exchanges.

graphic

This article is syndicated from Equitymaster.com

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