Adani’s ‘Zordar’ entry

Nifty50: 15,842 ▲ 60 (+0.3%)
Sensex: 52,973 ▲ 180 (+0.3%)

Hello Folks!
How was your weekend? Got your zzzz’s?  

Gautam Adani, for one, had a busy weekend. On Sunday, the world’s 5th richest man bought Holcim’s stake in Ambuja and ACC Cements. With this acquisition, the Adani Group is now the second biggest player in the Indian cement market. 

Most would call it a day after that. But not Mr. Adani. Earlier, on Friday, the Adani Group had announced it will buy 49% in Quintillion Media Ltd. So yes, while you were sleeping, Deal Street was buzzing…Details ahead.

Meanwhile, markets started out positive and managed to hold onto their gains at close. Could this be a good sign for all who got an LIC allotment? We'll find out tomorrow when it lists.

• The markets closed in the green and snapped the six-day losing streak. 
• Meanwhile, today’s movement suggests indecisiveness as the markets opened and closed nearly at the same level. 
• In all, 33 of the Nifty50 stocks closed in the green.

Among the Nifty sectoral indices, Bank (+1.4%) and Auto (+2.2%) saw most gains, while IT (-0.7%) and FMCG (-0.3%) saw losses.

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What’s trending

⭐Eicher's wheelie good results 🏍 

The stock of Eicher Motors, the maker of Royal Enfield bikes, revved 8% after it reported a robust set of numbers in Q4. The company posted its best-ever quarterly revenue at ₹3,193 crore, up 9% year-on-year. The net profit also rose 16% year-on-year to ₹610 crore. However, volumes of Royal Enfield fell 10% YoY.

⭐Amber Enterprises not-so-cool ❆

Air conditioning components maker Amber Enterprises' shares were locked in a 20% lower circuit. This comes after the company reported a sharp drop in its profit due to higher raw material prices and operating costs. The net profit declined 22% to ₹59 crore year-on-year. Meanwhile, the revenue rose 21% to ₹1,937 crore on higher volumes and better price realisations.

⭐ Jet fuel prices soar! 🛫

Jet fuel prices have increased by 5% to ₹1.2 lakh per kilolitre. In 2022, aviation turbine fuel (ATF) prices have increased by a whopping 61.7%. Jet fuel prices are revised on the 1st and 16th of every month based on the average international price of benchmark fuel in the preceding fortnight. ATF accounts for around 40% of airlines' operating costs. 

⭐Paytm gets loan-sum 💰

Paytm’s lending business is gaining traction as it witnessed a 749% growth in the value of the loans disbursed. Its parent company, One97 Communications, disbursed 26.4 lakh loans in April 2022 as compared to the 4.8 lakh loans in the same month last year. The digital payment company earns a fee for disbursing loans on behalf of other banks and finance firms. 

⭐ Wheat prices at a record high 🍞

Global wheat prices rose to a record high after the Indian government banned wheat exports. The prices increased to $453 per tonne when European markets opened on Monday. Wheat prices have been surging in 2022 due to supply disruptions caused by the Russia-Ukraine conflict. It’s important to note that Ukraine is an agricultural powerhouse.

⭐ Home loans get pricey 🏦

India’s biggest bank, SBI has hiked interest rate for home loans disbursed before 2019, again. Borrowers whose loans are linked to MCLR will have to pay 0.1% more as interest. MCLR or the marginal cost of funds-based lending rate (is the minimum rate at which banks are allowed to lend.. SBI has hiked rates for the second month in a row. Meanwhile, for home loans disbursed after 2019, the lending rate was already hiked by 0.4%. These loans are linked to RBI's repo rate, which was recently increased.

In Focus

Adani’s ‘Viraat strength’ crushes Cement ‘Deewar’

The Adani Group has come out of the blue to snatch the second spot in the country's cement sector, behind Ultratech. In its biggest ever acquisition, the conglomerate purchased Holcim's stake in Ambuja Cement and ACC for a whopping $10.5 billion. Shares of both Ambuja and ACC rose 2-4% on Monday following the development.

Adani's sudden entry into this space could spook existing players. Ultratech's shares closed 3% lower while Shree Cements slipped 2.5% on Monday. 

Ultratech is currently the market leader with a cement manufacturing capacity of 120 million tonnes per annum (MTPA). Meanwhile, the combined capacity of Ambuja and ACC stands at 70 MTPA. The Adani Group on Sunday said that it will double capacity to 140 MTPA in the next five years. 

Adani’s purchase is the largest-ever in the infrastructure and materials space. The acquisition is being seen as a win-win for both sides. For Adani Enterprises and its diverse infrastructure projects, it will solve a critical supply problem. Ambuja and ACC find a captive customer. 

It’s important to note that the Adani Group has been moving beyond its core businesses like ports, power and renewable energy. It has already ventured into data centre and media sectors. In fact, it also announced that it has bought a 49% stake in Quintillion Business Media, which runs business news website BQPrime on Monday. 

So, let's see where Adani goes shopping next.

IPO corner

More and more companies are lining up to tap the equity markets. Fertiliser manufacturer Paradeep Phosphates will launch its ₹1,502 crore public issue tomorrow. Ahead of its IPO, the company raised more than ₹450 crore from anchor investors. Click here to pre-apply for the IPO on Upstox. 

Good to know

What is an allotment? 

Allotment is the process through which shares are allotted to investors by the registrar. Once the subscription for an IPO closes, the registrar segregates the bids into various categories based on the types of investors (retail, institutional and non-institutional). Following this, the number of bids is assessed against the offer to determine if the IPO was undersubscribed or oversubscribed. The registrar then decides the number of shares to be allotted to investors.

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