Nifty50: 15,030 ▼ 77 (-0.5%)
Sensex: 49,902 ▼ 290 (-0.5%)
The markets opened weak, and after some initial buying, the benchmark indices witnessed selling pressure all day. Of the Nifty50 stocks, 27 closed in the red.
The Nifty Realty (+2.1%) and Nifty Media (+2.0%) indices witnessed the strongest gains, while Financial Services (-0.9%) and Metal (-0.9%) indices were the weakest today.
| Top gainers | Today's change |
| Coal India | ▲ 3.4% |
| Cipla | ▲ 2.0% |
| Sun Pharma | ▲ 1.9% |
| Top losers | Today's change |
| Tata Motors | ▼ 5.5% |
| Bajaj Fin Serv | ▼ 1.7% |
| M&M | ▼ 1.7% |
Here are the top stories of the day.
Adani Green to acquire SB Energy
- Adani Green Energy has signed an agreement to fully acquire SB Energy India, which has a 5 GW renewable energy portfolio. This acquisition at an enterprise value of $3.5 billion (~₹26,000 crore) is reportedly the largest M&A transaction in the renewable energy sector in India.
- SB Energy India is an 80:20 joint venture between Japan-based SoftBank and Bharti Group. With this acquisition, Adani Green will achieve a total renewable capacity of 24.3 GW and an operating renewable capacity of 4.9 GW. Shares of Adani Green rose 3.5% today and have gained about 22% this month.
Jyothy Labs posts stable quarter
- The Mumbai-based FMCG company reported a 26% YoY jump in its Q4 revenue from operations, which stood at ₹495 crore. Revenue from the flagship fabric care segment rose about 16%. However, the top line was boosted by the dishwashing and household insecticides segments, which grew over 30% each.
- Meanwhile, profit after tax rose 2.6% YoY to ₹27 crore. Profit growth remained muted because of a ₹23.5 crore write-off of excise duty receivable for previous years, which is an exceptional item. The stock was down 4% today and has been trading flat so far this month.
Domestic air traffic drops in April
- Domestic airlines carried a total of about 57 lakh passengers in April, a drop of 27% MoM. In April 2020, flight operations were suspended due to Covid.
- The average seat occupancy of market leader Indigo dropped from 66% to 58% and that of Spicejet fell from 76% to 70%. However, with a steady decline in new cases, both stocks witnessed buying interest this month. So far this month, shares of Indigo have gained about 2.4% and Spicejet is up 20%.
NBFCs stare at rising defaults
- The second wave has been harsher on NBFCs. Reports suggest that non-banking lenders have seen a 50% rise in customers missing payments in the first half of May.
- Most NBFCs have been forced to stop door-to-door collections after a rise in collection agents succumbing to Covid. This has resulted in a drop in collection efficiency during April and May. Some of the top NBFCs like Bajaj Finance (-1.2%), Muthoot Finance (-0.5%) and Shriram Transport Finance (-2.5%) ended weak today.
Closing bell
The markets rose about 3% in the first two days of this week. Today, they witnessed profit booking as banking heavyweights such as HDFC Bank and ICICI Bank took a breather after the recent rally. For the last few months, the Nifty50 has been moving between 14,300 and 15,300 and now stands close to the upper end of the range.
Meanwhile, in the US, the Dow Jones fell 0.7% yesterday and has shown signs of weakness on account of inflation fears. The tech-heavy Nasdaq has already corrected nearly 5% so far this month. At this point, the Indian markets seem to be disconnected from the movements in the major international indices.
Good to know
What is enterprise value?
Enterprise value (EV) is a measure of how much the company is worth. In other words, it is the cost of buying the company. It is calculated by adding the market capitalisation to the total debt, and subtracting the cash held by the company. Given that it considers debt and cash, it turns out to be a relatively accurate measure of a company’s value. For example, two companies with the same market capitalisation can have different enterprise values due to differences in their debt and cash balances.
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