RIL-Future deal stumbles at SC

Nifty50: 16,238 ▼ 56 (-0.3%)
Sensex: 54,277 ▼215 (-0.3%)

Although the indices closed in the negative, they were range-bound today. The advance-decline ratio was slightly tilted towards the losers with 27 of the Nifty50 stocks closing in the red. 

Among the Nifty sectoral indices, IT (+0.3%) and Auto (+0.2%) were the top gainers, whereas Media (-0.9%) and Realty (-0.9%) were the top losers.

Here are the top stories of the day.

SC verdict favours Amazon in RIL-Future deal

Shares of Reliance Industries and Future Group companies fell sharply, after the Supreme Court upheld Amazon’s plea to restrain the merger between Reliance Retail and Future Retail. The court said that the order of the Singapore arbitrator in October to put the deal on hold was valid and applicable in India.

Amazon and Future have been involved in legal cases over the Reliance-Future deal, with Amazon accusing Future of violating pre-existing contracts. After the Supreme Court verdict, Reliance Industries closed 2% lower for the day. Meanwhile, Future Retail and Future Lifestyle Fashions were locked in the 10% lower circuit, and Future Consumer fell nearly 8%.

Voltas profit jumps in Q1

In the June quarter, the air-conditioning major reported a consolidated net profit of ₹122 crore, up 49% YoY. This strong profit growth was led by a 38% rise in revenue from operations to ₹1,785 crore.

The company’s air-conditioner business was impacted due to lockdown especially during the peak summer season. Hence its volume growth was stunted to 10%. However, it's other business division called the electro-mechanical projects grew 67% and drove the overall revenue growth. Despite the strong results, shares of the company closed flat today.

JMC Projects bags new orders

The civil engineering and construction company has said that it has received orders worth ₹1,451 crore in India. The management has said that these orders were won by its water business and will help in expanding its client portfolio.

So far in this fiscal, the company has bagged orders to the tune of ₹6,000 crore. As of June 2021, its order book is at ₹15,961 crore, which is more than four times its FY21 revenue. Shares of JMC Projects were up around 2% today.

Closing bell

The markets witnessed profit booking today, and there were multiple reasons for it. First, the market had already seen a strong rally from Monday through Thursday. Second, the major event of the week, i.e. RBI’s interest rate decision was announced. Finally, it was the last trading day of the week, and traders typically do not prefer to carry their positions forward over the weekend. However, if one looks at the broader picture, the Nifty50 saw a solid 3% rise this week . It was an overdue rally, which broke out from a two-month long consolidation. Next week, inflation numbers will be released, and the RBI is projecting consumer inflation at 5.7% for FY22. Thus, any number around this figure might be absorbed by the market without any hiccup.

Good to know

What is TLTRO?

Targeted Long-Term Repo Operations (TLTRO) refers to a central bank’s attempt to spur economic growth by infusing liquidity. Under TLTRO, a central bank offers money to banks at the repo rate for a fixed period and takes government securities as collateral. Banks can use this money to invest in specific sectors through debt instruments. This encourages banks to lend more as they receive money at a cheaper rate and for a longer duration. 

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