Flying high

Nifty50: 17,816 ▲ 194 (+1.1%)
Sensex: 59,719 ▲ 578 (+0.9%)

Howdy, folks!

With markets rising in the last couple of days, bears seem to have taken some time off. Just like this huge bear that strolled into a supermarket in the US and walked out with candies!

• Benchmark indices closed higher for the second straight day amid positive global cues.
• In all, 42 of the Nifty50 stocks closed in the green. 
• Germany’s Producer Price Index (PPI) rose to 7.9% in August, hitting an all-time high.

All of the Nifty sectoral indices closed in the green, with Pharma (+3.0%) and Auto (+1.6%) witnessing the most gains.

What’s trending

⭐ Ircon International bags new order

IRCON (NSE): 41.7 ▲ 1.2 (+3.0%)

Indian Railways subsidiary Ircon International Ltd has received a new order from Mahanadi Coalfields worth ₹256 crore. The project comprises development of rail infrastructure for the Ananta open cast project in the Jagannath area. The duration of the project is 15 months from the receipt of the order.

⭐ Advanced Enzyme shares surge

ADVENZYMES (NSE): 290 ▲ 23 (+8.9%)

Shares of Advanced Enzyme Technologies surged by over 15% intraday after investment firm Nalanda Capital bought an additional stake in the company. Nalanda Capital through its India Equity Fund purchased 2.91 million equity shares, representing a 2.6% stake. As of June 2022, Nalanda India Equity Fund held a 6.2% stake in the company.

⭐ Mishtann Foods to set up ethanol plant

MISHTANN (BSE): 10.0 ▲ 0.09 (+0.9%)

Basmati rice producer Mishtann Foods has announced its plans to set up a grain-based ethanol plant. The facility will be set up in Dalpur village, Gujarat, at an estimated cost of ₹2,250 crore. It will have an annual revenue generation capacity of ₹3,500 crore and will be operational by Q2FY24.

⭐ Credit growth to rise in FY23

As per a report, credit growth in India is estimated to be at 13% in FY23, up from an earlier expectation of 10%. Further, credit growth is outpacing deposit growth. As a result, bank deposit rates are likely to go up further. Revival in loan demand from the corporate segment and higher working capital needs are expected to drive credit growth.

In Focus

Refineries on slow burner

Shares of leading oil refiners have given muted returns so far this month. In August, the crude oil processed by the refineries of these companies dropped by 9% as compared to July. What’s going on here? Let’s find out.

Firstly, the demand for refined petroleum products is moderating after witnessing a surge for most of the past year. As a result, refineries are lowering their processing capacity. Refineries processed 4.62 million barrels per day (mbd) in August, lower than the nameplate capacity of 5.02 mbd, as per data from the petroleum ministry. 

The period from June to August is usually marked by lower demand for fuel. Rainfall hampers mobility and leads to a decline in demand for petrol and diesel. Even the farm sector, which uses diesel in irrigation pumps, lowers its demand during monsoon.

The rising inflation is also one of the key factors for subdued fuel demand. It is prompting central banks across the globe to sharply raise interest rates, which can potentially slow down economic growth and moderate fuel demand. Notably, crude oil prices in the international market have corrected by over 18% so far in FY23. 

Because of muted demand, investors also seem to have turned cautious towards oil refiners, resulting in stock price decline in the range of 3% to 6% so far in September. 

Having said that, the retail selling price of petrol and diesel at pumps continues to remain unchanged despite corrections in crude oil prices, which can help protect the margins of oil refineries.

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Good to know

What is private equity?

Private equity is an alternative mode of investment whereby investors and funds directly invest in private companies. Private equity firms are typically organised as partnerships and invest money pooled from institutions and high net-worth individuals. PE firms usually make long-term investments that have a time horizon of 10 or more years. 

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