Street awaits FED delivery

Nifty50: 18,660 ▲ 52 (+0.2%)
Sensex: 62,677 ▲ 144 (+0.2%)

Namaste, friends!

Even the world’s richest man isn’t immune to stock market volatility. Elon Musk has been dethroned from his briefly-held position of the world’s richest man. The Fed’s rate hike spree has taken the sheen off high flying companies like Musk’s Tesla. This has led to a fall in his net worth. Obviously, the eccentric Musk is in combative mode.

• The markets stayed range bound ahead of the crucial Fed announcement (expected at 12.30am IST).
• Of the Nifty 50, 34 stocks gained.
• India’s wholesale inflation rate (WPI) has declined to a 21-month low of 5.8% in November.

Among the Nifty sectoral indices, Realty (+1.4%) and Metal (+1.2%) were the top gainers, while FMCG (-0.4%) was the sole loser.

What’s trending

⭐ Paytm board okays buyback

PAYTM (NSE): 529 ▼ 9.6 (-1.7%)

Paytm Board says ‘buyback karo’, but investors are not happy. Shares of Paytm declined 2.6% intraday after the company board approved its ₹850 crore share buyback plan. The company will buyback shares at ₹810 per share from shareholders, representing a 50% premium to the closing price on December 13 - the day of approval. Surplus liquidity available with the company will be used for share buyback. The buyback will be completed within six months and will be done through the open market route on stock exchanges.

⭐ M&M bets on EVs

M&M (NSE): 1,286 ▲ 2.6 (+0.2%)

Mahindra & Mahindra is slowly and steadily expanding its footprint in the electric vehicle (EVs) segment. The company has announced it will invest₹10,000 crore to set up an electric vehicle (EV) facility in Maharashtra. This will be done under the state’s industrial promotion scheme for EVs. The investment will be made 7-8 years towards the production of Born Electric Vehicles (BEVs), which includes electric-SUVs.

⭐ BoB to sell stake in Nainital Bank

BANKBARODA (NSE): 191 ▼ 1.8 (-0.9%)

State-owned Bank of Baroda (BoB) plans to sell its majority stake in Uttarakhand-based Nainital Bank. The bank board has approved the sale. BoB currently holds 98.5% stake in Nainital Bank, which it acquired in 1973 on the direction of RBI. Nainital Bank has about 150 branches across 5 different states.

⭐ Russia is India’s top oil supplier

Russia is the top oil supplier to India for the second month running. In November, India's oil imports from Russia rose by 4% compared to the previous month. This is the fifth straight month where imports from Russia have increased. This can be attributed to the price cap that could have hit oil supplies and payment options. The G7 nations along with Australia had imposed a price cap of $60 per barrel on Russian oil. This was to limit its ability to finance its war in Ukraine.

In Focus

Not ‘small shrimp’: Why the decline in shrimp stocks matters

Listed shrimp exporters such as Avanti Feeds, Apex Frozen and Waterbase have received a subdued response from investors in 2022. Shares of these companies have declined between 12–28% since last December. Let's look at some of the key factors behind this fall. 

Why are these stocks declining?

Blame inflation and Covid in China. According to the Seafood Exporters Association of India, demand for shrimps has declined by around 30% globally due to rising inflation impacting demand in key export markets like the US and Euro Zone. Meanwhile, China’s zero-Covid policy has also hit demand. China is one of the largest importers of Indian shrimps.

Shrimp prices are also falling

Along with the demand fall, the current prices of shrimps are at 4-year low. This is because of higher production in Ecuador, which has led to global oversupply. Indian exporters are facing fierce competition and are selling 100-count shrimp at ₹200/kg. This is below their break-even price of ₹300/kg. 

This has translated into lower shrimp-purchase prices in India as well. Not surprisingly, many shrimp farmers are not keen on seeding their ponds.  

Why are shrimp exports important? 

Last fiscal, India’s seafood exports had risen to $7.7 billion, a rise of 30% compared to previous year. Shrimp exports accounted for nearly 75% of total dollar earnings. Any decline in shrimp exports, thus, could have significant repercussions on the volume of seafood exports from India. Already, industry watchers are expecting seafood exports to miss the FY23 target of $8.8 billion.

IPO corner

The IPO of wine producer and seller Sula Vineyards sailed through on its last day as the IPO received overall subscription of 2.3 times on Day 3. Meanwhile, the IPO of Abans Holdings, which provides NBFC and commodity trading services, was subscribed 46% on Day 3. The IPO of Landmark Cars was subscribed 39% on Day 2. Click here to apply to these IPOs on Upstox. 

Good to know

What is a share buyback?

A share buyback is a corporate action where a company offers to buyback its shares from existing shareholders. The buyback is usually initiated at a higher price than the market price. There are two ways a company may buy back its shares—through a tender offer or through the open market. There could be various reasons to launch a buyback like to reward existing shareholders or to stop the fall in value of a stock, by reducing the supply of the stock. 

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