Market recap for 23 February 2021

Nifty50: 14,707 ▲ 32 (+0.2%)

Sensex: 49,751 ▲ 7 (+0.0%)

After a gap-up opening, the markets largely stayed in the green and broke their five-day-long, downward slide. Despite a nearly flat closing of the Nifty50, 34 of its stocks posted gains today. 

The Nifty Metal index (+3.8%) was the top sectoral gainer for the second consecutive day, followed by Nifty Realty (+2.7%). Meanwhile, the Nifty Financial Services (-0.5%) and Nifty Bank (-0.4%) were the top losers today.  

Here are the top stories of the day. 

Hindalco rises on debt-reduction plans

• The aluminium and copper manufacturer announced plans to cut its debt by $2.9 billion by the end of 2022. The company is expected to have a gross debt of $9.2 billion by FY21 or three times its EBITDA, and it aims to achieve a net debt/EBITDA ratio of 2.5 times in less than two years.
• Allocation for growth capex is expected to be in the range of $2.5-3 billion over the next five years. The management said that it does not have plans for large acquisitions. The stock closed 5.7% higher today and has risen nearly 47% so far this month.

ONGC spurts on rise in oil price

• Shares of the state-owned oil and gas company gained 5.6% on account of rising oil prices and a possible revision in the government’s gas pricing.
• Oil prices have risen of late due to rising demand along with a controlled output by the OPEC+ countries. Extreme cold in Texas, too, has paused oil production, pushing prices up. Besides ONGC, oil-sensitive stocks of drilling and off-shore companies such as HOEC (+6.1%), Aban Offshore (+9.9%) and Jindal Drilling (+4.9%) posted major gains too.

Bharat Forge gains on deal with Paramount 

• The Pune-based engineering company has inked a deal with global aerospace manufacturer Paramount Group to manufacture armoured vehicles in India. 
• The armoured vehicle, called ‘Kalyani M4’, is a multi-role vehicle made for military applications. The company has also bagged an order worth ₹178 crore from the Indian Ministry of Defence for the supply of these vehicles. Shares of Bharat Forge closed with gains of 3.2%.

Zuari Agro soars on plant sale

• Shares of the bulk fertiliser manufacturer were up 17.8% as the company announced the sale of its fertiliser plant in Goa at an enterprise value of $280 million (~₹2,030 crore). The Goa plant operations had a negative net worth as of FY20. 
• The buyer, Paradeep Phosphates Ltd, is engaged in fertiliser manufacturing and the above transaction will help it to consolidate bulk fertiliser operations.

Closing bell

Even though most banking stocks continued to remain subdued today (Bank Nifty fell 0.4%), the Nifty50 managed to close in the green supported by heavyweight Reliance Industries and metal stocks. The market is expected to remain volatile this week owing to the February derivative expiry on Thursday and GDP data release on Friday. The rise in the price of oil remains an overhang on the markets, and any signs of its cooling off would be cheered by equity investors, at least in the near term.

Good to know

What is enterprise value?
Enterprise value is the sum of a company’s market capitalisation (share price*outstanding shares) plus company’s debt minus cash. It’s a measure of the company’s aggregate value. It is considered a more accurate measure compared to market capitalization as it specifies how much money would be needed to buy that company.

Yay ? or  ? Nay?
We'd love your thoughts on this market recap.

The IPO of  Heranba Industries is live on Upstox. Read about the public issue in our blog here. You can subscribe to the IPO with Upstox here.

Haven't tried out Upstox yet? Click here to open your account now!

Disclosures and Disclaimer

Investment in securities markets are subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.