Reliance lands India’s first logistics park deal, FPIs bounce back & more

Nifty50: 18,329 ▼ 20 (-0.1%)
Sensex: 61,624 ▼ 170 (-0.2%)

Hola, folks!

With the markets only adding to our Monday blues, here’s what we have been busy checking out today. Ever thought of owning an entire village? Yes, you read that right. You can now buy a Spanish village for ₹2.1 crore. That’s less than what you would pay to buy a 3 bedroom flat in Bandra, Mumbai! The village has 44 homes, a hotel, a church, a school, and a municipal swimming pool! But here’s the catch - it’s been uninhabited for 30 years.

• Meanwhile, markets were choppy. Benchmark indices closed in the red despite positive global cues.
• In all, 26 of the Nifty50 stocks closed higher.
• India’s retail inflation eased to 3-month low, came in at 6.7% in October from 7.4% in September 2022

Among the Nifty sectoral indices, Metal (+1.7%) and Realty (+1.1%) saw maximum gains, while Media (-2.4%) and FMCG (-1.3%) were the top losers.

What’s trending

⭐ Reliance to make logistics park

RELIANCE (NSE): 2,614 ▼ 17 (-0.6%)

Reliance Industries has been awarded the project to build the country’s first multimodal logistics park (MMLP) in Chennai. The MMLP will be spread over 184 acres and will cost ₹1,424 crore. The Centre expects the first phase of the project to be completed in two years. It is estimated to cater to 7.17 million metric tonnes of cargo over 45 years.

⭐ Grasim’s profit falls, share jumps

GRASIM (NSE): 1,745 ▲ 37 (+2.1%)

Grasim Industries reported a 1.5% year-on-year (YoY) fall in its net profit tot ₹964 crore. However, revenue from operations rose nearly 37% YoY to ₹6,745 crore. The fall in margins was due to a rise in input costs and other expenses. While input costs increased over 48% YoY, other expenses grew  48% YoY. Meanwhile, revenue from the viscose staple fibre business increased 30% YoY to ₹3,903 crore. The chemicals business reported 66.5% growth in sales to ₹2,708 crore.

⭐ Manappuram Finance declares dividend

MANAPPURAM (NSE): 116 ▲ 8.0 (+7.3%)

Manappuram Finance reported a 10.7% YoY growth in its net profit at ₹409 crore. Its assets under management grew by 7.89% YoY to ₹30,664 crore. It has also approved payment of interim dividend of ₹0.75 per share with face value of ₹2 each. The company’s gold loan portfolio stood at ₹19,190 crore, while the number of gold loan customers has reached 24 lakh.

⭐ FPIs make a stellar comeback 

Foreign Portfolio Investors (FPIs) have turned net buyers in the Indian market once again. As per NSDL data, FPIs have invested ₹18,979 crore in equities so far this month. Last month, FPIs were net sellers logging an outflow of ₹8 crore in October and ₹7,624 crore in September. Experts believe softening of the US dollar and signs of moderation in the US inflation and the resilience of Indian markets may have triggered the FPI comeback.

In Focus

Rural slowdown hits FMCG cos

India’s FMCG sector is in the middle of a consumption slowdown that has lasted four quarters already. According to a new industry report, the overall volume growth in the FMCG industry declined by 0.9% in Q2 of FY23. This is the fourth consecutive quarter of negative volume growth. In plain English, the demand for soaps, detergent, packaged food etc. has been on the decline. Why is this happening? Let's find out 

The rural market accounts for over 35% of annual FMCG sales. It reported a 3.6% yearly decline in volumes in the September quarter. This is a higher fall as compared to the 2.4% annual decline in previous quarters. 

The reason — persistently high inflation further fuelled by FMCG companies hiking prices, sometimes in double digits. Though, TBH, FMCG companies had to hike prices to beat high input costs. So, yeah, blame Inflation.

Most listed FMCG companies present in rural markets like HUL, Dabur and Marico have echoed concerns of demand slowdown in their September quarter earnings. The urban markets provided a glimmer of hope, reporting a 1.2% rise in volume in the same period. The demand growth was largely led by high demand for food products. 

The sector was also hit by changing consumer preferences. In a bid to beat inflation, consumers have switched to smaller packs. 

The subdued rural demand is weighing on investors' sentiments as well. The FMCG sectoral index witnessed a downfall for the third consecutive day. Overall, the Nifty FMCG index has declined over 2.5% from its peak in the last two weeks.

IPO Corner

Kaynes Technology IPO received an overwhelming response on its last day as the issue was oversubscribed 34 times. The IPO of Inox Green Energy Services was subscribed 0.85 times on Day 2, while the IPO of Mumbai-based realty-firm Keystone Realtors received a muted response and was subscribed by 0.08 times on Day 1. Click here to apply to these IPOs on Upstox.

Good to know

What is private equity?

Private equity is an alternative investment route where investors directly invest in private companies (i.e. companies that are not listed on exchanges). Investors could also engage in buying out a public listed company resulting in delisting of the public company. This capital infusion could be used to fund new technology, expand working capital and strengthen the balance sheet. The pricing of shares for a company in private equity is determined through negotiations between buyers and sellers and not by market forces, as is generally the case for publicly-listed companies.

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