Upbeat vibes

Nifty50: 17,622 ▲ 91 (+0.5%)
Sensex: 59,141 ▲ 300 (+0.5%)

Greetings, people!

Seeing the markets back in the green lifts a load off most investors’ minds. Just like school kids in Bihar will now have no load on their backs, at least for one day in a week. The Bihar government is going to introduce a ‘no bag day’ rule in schools and a mandatory games period at least once a week to reduce burden on students.

• Benchmark indices rebounded on Monday despite weakness in the global markets.
• In all, 35 of the Nifty50 stocks closed in the green. 
• Investors await the key interest rate decision by the US Fed later this week.

Among the Nifty sectoral indices, IT (+0.3%) and Bank (+0.3%) saw most gains, while Realty (-0.9%) and Metal (-0.4%) were the top losers.

What’s trending

⭐ M&M divests stake in its subsidiary

M&M (NSE): 1,292 ▲ 42 (+3.3%)

M&M has sold a 30% stake in its renewable energy subsidiary Mahindra Susten to Ontario Teachers’ Pension Plan. The stake sale was done through Mahindra Holding Limited, a wholly owned subsidiary of M&M for a cash consideration of ₹711 crore and an equity value of ₹2,371 crore. As part of the deal, shareholder loans worth ₹575 crore given by the Mahindra Group to Mahindra Susten will be repaid. 

⭐ Indian Army invites cos for procurement

DATAPATTNS (NSE): 1,233 ▲ 49 (+4.2%), PARAS (NSE): 789 ▲ 36 (+4.8%)

The Indian Army is inviting the domestic defence industry to provide critical defence equipment for emergency procurement. The procurement window will be open for six months and delivery of the equipment is expected within one year of signing the contract. Defence stocks like Data Patterns and Paras Defence were upbeat following the news. 

⭐ Welspun Corp rises on big order

WELCORP (NSE): 267 ▲ 19.8 (+8.0%)

Shares of the leading pipe manufacturer surged 10% intraday after the company said that it had bagged a significant order in the US. The company will supply 1,256 km or 100,000 MT of high-frequency induction welding pipes to be used for transporting captured carbon dioxide. The company said that the order will be executed in FY24. 

⭐ Inox Wind’s arm plans IPO

INOXWIND (NSE): 140 ▼ 4.8 (-3.3%)

Shares of Inox Wind surged 8% intraday after the reports claimed that the company’s subsidiary is expected to launch its IPO next month. Inox Green Energy Services, a major wind power and maintenance, is expected to launch its ₹740 crore IPO in October this year. The net proceeds will be reportedly used to reduce debt at the group level.   

In Focus

Logistics industry gets policy boost

Logistics companies were in the spotlight today following the announcement of the National Logistics Policy (NLP). The policy aims to address challenges faced by different modes of transport including water, air, roads and railways. Here are some of the key highlights of the policy.

At present, the country’s logistics cost stands at close to 14% of GDP, which is higher compared to global benchmarks. Developed economies like the US, South Korea and Singapore have single digit logistics cost-to-GDP ratio. The policy aims to bring down India’s ratio down to single digits by 2030. 

According to the Logistics Performance Index of 2018 published by the World Bank, India was ranked 44th globally in logistics costs. The New Logistics Policy aims to improve the country's ranking and bring it among the top 25 countries by 2030. 

Part of the reason for high logistics cost is the over-dependence on road transport, which involves high fuel costs. Road transport accounts for nearly 60% of all transport in the country. Experts believe the policy will facilitate a modal shift in the logistics industry from road transport to railways and waterways, which currently have a low market share.

For this, the NLP will work in conjunction with the Sagarmala and Bharatmala schemes to boost  waterways and roadways for seamless movement of goods. In addition, the policy will emphasise technology-led growth through the Unified Logistics Interface Platform (ULIP), which will bring all the digital services related to the transportation sector under a single portal.

All in all, the policy is a step in the right direction towards promoting seamless movement of cargo and people. Having said that, effective implementation will hold the key to the success of the policy.

IPO corner

Leading drug maker Mankind Pharma has filed its draft red herring prospectus (DRHP) with SEBI for its IPO, which is expected to be worth ₹5,500 crore. The public issue will be an offer for sale by the company’s promoters and existing investors. The company reported revenue of nearly ₹8,000 crore and EBITDA of ₹2,200 crore in FY22.

Good to know

What is burn rate?

Burn rate refers to how fast a startup is spending money. Burn rate helps in setting realistic business timelines and also indicates how long a company has before it runs out of funds. A positive burn rate means a company is spending more money than it has or makes and that it should either cut costs or increase revenues. Burn rate is calculated dividing cash by monthly operating expenses.

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