In the doldrums 😒

Nifty50: 16,301 ▼ 109 (-0.6%)
Sensex: 54,470 ▼ 364 (-0.6%)

Markets are Red

Monday is Blue

Rupee is down

What does one do?

That seems to be the refrain in the markets, right now.

We are great believers in the magic of the markets, though. So, we are staying put. 

Anyhoo, the LIC IPO finally closed today. The offer received a solid response considering its size and the market conditions.

While on IPOs, remember the other public offer everyone wanted a taste of? Yeah, we are talking about Zomato. Its listing was almost a watershed moment for the IPO markets. Fast forward to today, and things are looking a little bleak for the food delivery giant. More on this below.

• Markets slipped further following weak cues from Asian markets.
• Rising interest rates and a tightening lockdown in Shanghai are raising concerns about slower economic growth.
• Of the Nifty50 stocks, 31 closed in the red.

Among the Nifty sectoral indices, only IT (+0.05%) saw gain, while Media (-2.6%) and PSU Bank (-2.3%) were the top losers. 

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What’s trending

⭐DCBingly good👍

DCB Bank’s shares closed 3% higher after reporting a strong quarter. Q4 net profit grew 46% year-on-year to ₹113 crore. This was on the back of a 22% net interest income growth to ₹3,805 crore in the same period. However, the bank’s asset quality worsened as gross NPAs grew marginally.

⭐Oil’s not well with Bajaj Consumer 😬

Bajaj Consumer, known for its hair oil brand Almond Drops, fell 6% today after weak results. Its Q4 standalone net profit fell by 29% year-on-year to ₹38.4 crore. This was on the back of a 11% drop in sales to ₹216 crore due to a decline in hair oil sales volume.

⭐ Campus hits the ground running 👟
Athleisure footwear company Campus Activewear was quick off the blocks today as its shares listed at a 21.5% premium amid a weak market. The public issue was subscribed over 51 times, and its shares listed at ₹355 against the issue price of ₹292. 

⭐ Rupee dives, dollar rides 💲
The dollar is giving the rupee a run for its money, literally. The rupee hit an all-time low of 77.28 against the US dollar today. The dollar surged to its highest level in over two-decade after the US Federal Reserve raised interest rates to combat soaring inflation. But there is a silver lining. Stocks of export-driven sectors like IT and Pharma gained as a weaker rupee boosts revenues.

⭐HUL’s ‘Tall-Venti-Grande’ strategy 😎
HUL will roll out ‘bridge packets’ which will be priced between existing highest and lowest prices to beat inflation. The aim- to help consumers get better value for their money and be able to buy at an affordable price. The FMCG major believes that inflation is likely to continue for the next few quarters.

⭐ Over to the maidens 🏏
Why should boys have all the fun? Soon, there could be a women’s edition of the IPL. Cashing in on the massive success of the men’s IPL, BCCI is now looking to auction the media rights of six women’s teams by early next year.

In Focus

Zomato: 24% off IPO price if you order now

Zooming Zomato has hit a speed bump, The stock, which had catapulted over 100% only four months after listing, is trading 24% below the IPO price today. How did it all come to this? Let's break it down.

The ‘re-opening’ of the economy has hit the company’s core delivery business. With restaurants reopening, Zomato has seen the growth in new orders decrease. Gross order value, or the sum of all orders amounts, rose by a mere 1.7% quarter-on-quarter to ₹5,500 crore in the third quarter of the year.  Compare this to the second quarter where gross orders grew 19% to ₹5,400 crore. Numbers for Q4 are awaited.

To add to that, central banks across the world have started hiking interest rates. You may now wonder, how does this impact Zomato?

The current scenario of interest rate hikes across the globe impacts high-growth stocks like Zomato. This is because institutional investors pull out money from emerging markets like India and invest elsewhere. Since institutional investors have a significantly large shareholding, their pulling out of a company looks like a large sell-off. This is also why the stock price is falling. As per Zomato’s recent shareholding data, large investors have gradually reduced their stake in the company to 13.4% at the end of March 2022 from 15.6% at end of December 2021. 

But small investors are still keeping the faith. Retail investors have rushed in to buy and their overall stake has increased to 3.5% from 1.6% in the same period.

IPO corner

As expected India’s most-awaited public issue received overwhelming response. On the final day, LIC IPO was subscribed nearly three times. While the retail portion was subscribed around two times, the policyholder category was subscribed around 6 times. Investors will eagerly wait for12 May 2022, when the allotment of shares will be finalised.

Good to know

What is a Red Herring Prospectus?

Prior to its IPO launch, every company has to submit an offer document, or a Red Herring Prospectus (RHP), with the Securities and Exchange Board of India (SEBI). This document reports details like the objective of the company and its reason for going public. The document contains important information related to the business and financial aspects of the company, which help investors decide whether or not to subscribe to the IPO. 

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