Share markets in India have erased early gains and are presently trading on a negative note.
In early trade today, the BSE Sensex rose over 250 points, extending gains to the fifth consecutive day fueled by news of an improving economy and de-escalating tensions on the India-China border.
According to a report in The Economic Times, the government heralded the "early green shoots of economic revival" in May and June, pointing to higher electricity and fuel consumption, greater movement of goods, and an increase in financial transactions.
The finance ministry listed as many as 14 separate indicators across manufacturing, services, finance, and agriculture to back this up in a statement entitled 'Increase in Economic Activity-Improvement in Economic Indicators' issued on Tuesday.
Presently, the BSE Sensex is trading down by 66 points (down 0.2%), at 35,400 levels.
Meanwhile, the NSE Nifty is trading down by 16 points (down 0.2%).
The BSE Mid Cap index is trading up by 0.2%, while the BSE Small-Cap index is trading down by 0.5%.
Sectoral indices are trading on a mixed note with stocks in the telecom sector and banking sector witnessing selling pressure. FMCG stocks are witnessing buying interest.
The rupee is trading at Rs 75.68 against the US$.
Gold climbed to record high in early trade today and is presently trading up by 0.3% at Rs 48,355 per 10 grams.
Market participants are tracking Shriram Transport share price as the company has initiated talks with merchant bankers for its proposed Rs 15 billion rights issue. The company will be tapping equity markets after a decade.
Reportedly, the rights issue may be launched at the end of July or the first week of August and the money will be utilized for the company's growth, to meet capital adequacy ratio (CAR) and for other purposes.
In news from the paints sector, Asian Paints is among the top buzzing stocks today.
Shares of the company surged over 7% today after the company declared its quarterly results and after rating agencies maintained an outperform call on the stock.
On a consolidated basis, Asian Paints' net profit declined 2.1% to Rs 4,618.9 million on 7.1% fall in net sales to Rs 46,355.9 million in the quarter ended March 2020 (Q4FY20).
The paint maker's profit before tax stood at Rs 6,992.2 million in Q4FY20, declining 5.3% from Rs 7,383 million in the same period last year.
Total tax expense declined 13.2% to Rs 2,189.7 billion in the quarter under review.
On the operating front, earnings before interest, tax, depreciation, and amortization (EBITDA) dropped 3% year-on-year (YoY) to Rs 8,596.2 million in the quarter ended March 2020, but margin increased 80 bps to 18.6% YoY.
"Loss of sales due to the lockdown in March 2020 impacted the decorative business segment in an otherwise strong quarter with double-digit volume growth in the first two months of the quarter," Amit Syngle, the company's Managing Director & CEO said.
On a consolidated basis, the company's net profit rose 25.6% to Rs 27,741.9 million in fiscal year ending 2020 (FY20) as against Rs 22,080.4 million reported in the fiscal year ending 2019.
Net sales for FY20 stood at Rs 202.1 billion in FY20, rising 5% from Rs 192.4 billion in FY19.
The company's board has recommended a final dividend of Rs 1.5 per share.
Asian Paints share price is presently trading up by 6.7%.
Moving on, in latest developments from the IPO space, dealers in unlisted shares have seen a rise in the number of calls for trades in UTI Asset Management Company (AMC).
Interest in the stock has picked up in anticipation of the IPO but there is an air of caution because of the current market conditions, said dealers in the unlisted space.
Firms have been cautious about proceeding with their IPOs due to the pandemic and resulting market volatility.
Reports state that buyers are unwilling to pay a premium for the shares.
Recently, UTI AMC received the market regulator's nod for initial public offering (IPO) to raise Rs 30 billion.
This will be the third public offering in the Indian mutual fund industry after Nippon Life Asset Management and HDFC AMC.
The IPO of the country's largest AMC in terms of total assets under management (AUM) comprises sale of 38,987,081 equity shares by existing shareholders, according to the draft red herring prospectus (DRHP).
Speaking of IPOs, in one of the editions of The 5 Minute WrapUp, Ankit Shah has shared how IPOs offer insights into the mood of the stock markets.
He picked the six most successful IPOs of 2019 and checked the retail investor enthusiasm for them.
Obviously, all these IPOs were oversubscribed across investor categories. But the level of retail investor enthusiasm differed widely, depending on the overall market sentiments.
This can be seen in the chart below:
Are Retail Investors Back in the IPO Game?
Here's what Ankit wrote about it...
- Clearly, IRCTC witnessed the highest number of bids for the retail category. Factoring in the discount of Rs 10 per share for the retail category, the total bids were worth a whopping Rs 3,242 crore. Over five times the entire IPO size!
Polycab India and the recent IPO of CSB Bank also received a strong thumbs-up from retail investors.
Does this hint that retail investors are coming back to the markets? It would be interesting to see how this trend pans out in 2020.
We will keep you updated on all the developments from this space. Stay tuned!
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