Stocks in the News highlights (22-June-2021)
1) Maruti Suzuki to hike prices in Q2
The country’s largest car manufacturer is planning to raise prices of its cars to offset rising input costs. This will be the second price hike by Maruti this fiscal after the 1.6% hike in the June quarter.
2) PSU banks soar on stake sale buzz
Shares of state-owned lenders Central Bank of India and Indian Overseas Bank soared 20% on Monday, after reports suggested that the government selected the two banks for divestment. The government will reportedly divest 51% of its stake in each of these banks in the first phase. Investor interest was also high in other PSU banks such as SBI (+1.5%), Bank of India (+4.6%) and Bank of Baroda (+2.5%).
3) Guj Alkalies posts jump in profit
Gujarat Alkalies and Chemicals, which is one of the biggest manufacturers of caustic soda, reported strong profit growth in Q4. Its consolidated net profit soared two-fold to ₹34.6 crore from ₹11.4 crore in March 2020.
4) Dish TV India Ltd has approved raising up to Rs 1,000 crore
through a rights issue in one or more tranches. Funds would be
raised through issuance of fully paid-up equity shares at Rs 10 per
share, including premium of Rs 9 per fully paid-up equity share.
5) Gold loan company Muthoot Fincorp has picked up 54 per cent
stake in Hyderabad-based fintech startup Paymatrix by buying
out existing investors as part of its added focus on digital
payments segment.
6) IIFL Home Finance plans to raise up to ₹5,000 crore, to boost its
lending business, through public issue of non-convertible
debentures. The company has filed a draft shelf prospectus with
stock exchanges BSE and NSE for this public issue of bonds.
7) Intel Corp will work with India's Reliance Jio to develop 5G
networking technology. Intel's venture capital unit last year
invested $250 million in Reliance Industries Ltd's Jio Platforms
unit, saying the two companies would find areas of technology
partnership. Intel will work on "co-innovations" with Reliance Jio
for its 5G radio-access network (RAN), among other things.
8) Bharti Airtel and Tata Group announced a strategic partnership
for implementing 5G networks solutions for India 2022.
9) SpiceJet, the sole operator of MAX in India, is currently yet to re-initiate talks with
the civil aviation regulator DGCA on MAX resumption and several layers of processes are pending such as training of
pilots, getting the aircraft and simulator ready, officials said.
10) The People’s Bank of China (PBOC) has changed the way banks calculate deposit rates, lowering fundraising costs for
financial institutions. The central bank also left the one-year loan prime rate (LPR) at 3.85 per cent, while the five year rate remained at 4.65 per cent.
11) Central Bank of India and Indian Overseas Bank (IOB) have been shortlisted by the central government for divestment, according to a media report.
Around 51% stake sale might occur in each of the two banks in the first phase of divestment.
However, a few analysts expect the financials of both banks to create roadblocks in the divestment process.
Indian Overseas Bank recorded a net profit of Rs 831.47 crores for the financial year 2020-21 as compared to a net loss of Rs 8,527.40 crore in FY 2019-20. The bank's asset quality improved as net NPAs fell to 3.58% from 5.44%.
On the other hand, the Central Bank of India reported a drop in net profit. It fell to Rs 887.58 crores for FY20-21 from Rs 1,121.35 crores. Net NPAs improved to 5.77% from 7.63%.
The central government had set a divestment target of Rs 1.75 lakh crores for FY 21-22.
12) PNB Housing Finance has filed an appeal in the Securities Appellate Tribunal after SEBI sought a review for the deal cracked with private investors led by private equity firm Carlyle.
SEBI’s review of the proposed preferential issue comes with the concern that the valuation of shares of the company is not in line with the Articles of Association of the company.
SEBI in its letter has also said that the issue should not be acted upon till the valuation of the shares is carried out by an independent entity in regulation with the laws and Articles of Association.
13) Tamil Nadu government will constitute an "Economic advisory council to the Chief Minister” with leading economic experts globally.
The council will consist of Nobel laureate Esther Duflo and former RBI Governor Raghuram Rajan.
The council also consists of former chief economic advisor to the central government Dr Arvind Subramanian, development economist Jean Dreze and former Union finance secretary Dr. S Narayan.
Governor Banwarilal Purohit said that this move is to revitalize the state’s economy and ensure that the benefits of economic growth reach all segments of society.
14) HCL Tech has made three appointments in Asia to strengthen its presence in Asia. It has named Joonho Moon in South Korea, Terry Tai in Taiwan, and Nguyen Ha Tuan in Vietnam to lead and drive growth in these geographies.
15) BPCL: The commerce and industry ministry has floated a draft cabinet note seeking views on a proposal to allow up to 100% foreign investment under automatic route in oil and gas PSUs, which have an 'in-principle approval for disinvestment.
16) ICICI Bank: S&P Ratings agency gave ICICI Bank a 'BBB-' long-term and 'A-3' short-term issuer credit ratings.
17) SEBI has announced modifications in the norms for investment and disclosure by Mutual Funds in derivatives. Accordingly, mutual funds may enter into plain vanilla Interest Rate Swaps (IRS) for hedging purposes. The value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the scheme. In case of participation in IRS is through over the counter transactions, the counter party has to be an entity recognized as a market maker by RBI and
exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the scheme.
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