Voda-Idea’s woes worsen

Nifty50: 16,258 ▲+128 (+0.7%)
Sensex: 54,369 ▲+546 (+1.0%)

The markets rose for the third day in a row and scaled new highs. Interestingly, despite the strong rise, only 19 of the Nifty50 stocks closed in the green. 

Among the Nifty sectoral indices, Financial Services (+2.5%) and Bank (+2.3%) were the top gainers whereas Realty (-1.6%) and Media (-1.2%) were top losers.  

Here are the top stories of the day.

SBI’s Q1 profit jumps

The country’s largest public sector bank reported its highest-ever quarterly net profit in Q1FY22. The lender’s bottom line soared by 55.2% year-on-year to ₹6,504 crore, aided by a 46% drop in provisioning for non-performing assets.

SBI’s net interest income also rose by 3.7% to ₹27,638 crore. But the net interest margin dropped marginally to 3.1% in June 2021 from 3.2% in June 2020. In the same period, gross non-performing assets declined to 5.3% from 5.4%, indicating slight improvement in the asset quality amid the second wave. After the strong results, shares of SBI gained 2.1% today. 

Vodafone won’t infuse fresh equity in Vi

The Vodafone Group CEO has said that the company won’t infuse fresh equity into the cash-strapped Vodafone Idea (Vi). As of 31 March 2021, Vi had a debt of ₹1.8 lakh crore. Further, the company owes more than ₹50,000 crore as outstanding AGR dues to the government.

According to reports, the Chairman of the Aditya Birla Group (which owned erstwhile Idea Cellular) has written to the government that he is ready to hand over the company's stake in Vi to a government entity. Amid this, shares of Vi have been on a downward spiral, falling over 27% in the last two trading sessions.

IPO bonanza on D-Street

The Indian markets witnessed a flurry of new IPOs, with as many as four public issues opening today. The companies going public today include QSR operator Devyani International, diagnostics player Krsnaa Diagnostics, pharma company Windlas Biotech, and tiles manufacturer Exxaro Tiles.

On Day 1, IPO of Devyani International (which is the largest of the four) was subscribed over 2.6 times, while those of Krsnaa Diagnostics, Windlas Biotech and Exxaro Tiles were booked 1.9 times, 3.1 times and 4.5 times, respectively. You can apply for these IPOs on Upstox by clicking here.

Closing bell

On the face of it, it looked as if the entire market rose today along with the Nifty50 index. However, except the banking and the NBFC space, all other sectoral indices closed negatively. Similarly, the Midcap 100 and Smallcap 100 indices also underperformed and closed lower. Essentially, the financial stocks seem to be catching up to the broader market. RBI’s monetary policy meeting began today and the decision on the interest rates will be announced this Friday. The street expects the interest rates to be left unchanged.

Good to know

What is IPO oversubscription?
When a company decides to list on stock exchanges through the IPO route, it offers shares which are open for subscription. Following this, investors (individual as well as institutional) bid for the shares of the company. If the company receives more bids than the shares it has offered, it means that the IPO has been oversubscribed. Investors must look at the total subscription numbers to find out if an IPO has been oversubscribed as the exchanges also provide category-wise numbers. Oversubscription indicates high demand for the company shares and a potential for listing gains. 

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Investment in securities markets is subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.