Reliance’s Continued Investments, Auto Sales Jump, & more.

1st October 2020 Highlights: Markets end up over 1.5%, Reliance’s Continued Investments, Auto Sales Jump, & more...

-1st October 2020-

Sensex 38,697.05 ▲ 1.65%

Nifty 11,416.95 ▲ 1.51%

The markets ended up over 1.5% as unlock 5.0 kicked into place and the government allowed a greater portion of the economy to start functioning again. Today, all sectoral indices ended on a positive note, indicating all-round participation. Among the sectors, banks clearly led the upward march, as the Nifty Bank index jumped 4.1%. IndusInd Bank (+12.4%), Bajaj Finance (+5.0%) and Axis Bank (4.1%) were top gainers in the Nifty50. The market sentiment was generally upbeat after the Purchasing Managers’ Index for September came in at 56.8—the highest reading in eight years.

Top Gainers (Nifty)

IndusInd Bank - Rs 592.10 ▲ 12.41% 

Bajaj Finance - Rs 3442.80 ▲ 5.01%

Axis Bank - Rs 443.70 ▲ 4.49%

ICICI Bank - Rs 369.15 ▲ 4.02%

Tech Mahindra - Rs 822.50 ▲ 3.88%

Top Losers (Nifty)

Dr Reddy's - Rs 5113.80 ▼ 1.41%

ITC - Rs 170.85 ▼ 0.52%

Hindalco Industries - Rs 174.45 ▼ 0.51%

NTPC - Rs 84.80 ▼ 0.47%

Reliance - Rs 2225.05 ▼ 0.39%

Here are the top stories of the day.

Reliance Industries Gets Two More Investments

Abu Dhabi-based sovereign wealth fund Mubadala will pick up 1.4% stake in Reliance Retail Ventures Ltd. (RRVL), a subsidiary of Reliance Industries for Rs 6,247.5 crores.

In another announcement, RIL said that Silver Lake’s co-investors will invest an additional Rs 1,875 crores in RRVL.

The aggregate investment by Silver Lake and its co-investors in RRVL become Rs 9,375 crore, which translates to a 2.13% equity stake in RRVL.

Shares of the company ended 0.39% lower at Rs 2,225.05 per share. Mubadala's announcement came after market hours today.

IPO Listing:  CAMS and Chemcon

The shares of Computer Age Management Systems (CAMS) and Chemcon Specialty Chemicals were listed today. The IPOs were open for subscription between September 21 and 23.

Chemcon Speciality Chemicals listed on the exchanges with a bumper 115% premium over its issue price of ₹340. The listing gains were expected, considering the relatively small issue (₹318 crore) was oversubscribed by a whopping 149 times. On the other hand, CAMS—a larger public issue (₹2,244 crore) that was oversubscribed 47 times—delivered 23% gains upon listing. The four other companies that issued their IPOs earlier in the year are all trading above their issue prices, with returns ranging from 11% to 124%. Interestingly, at the close of trade, Chemcon was down 20% from the opening price with only sellers on the counter.

CAMS:

Shares of the company ended 13.95% higher at Rs 1,401.6 per share. Its issue price was Rs 1,230 per share.

The Rs 2,244-crore IPO was subscribed almost 47 times on the last day of bidding as it received bids for 60.26 crore equity shares against issue size of 1.28 crore shares.

Chemcon Specialty Chemicals:

Shares of Chemcon ended 72% higher at Rs 584.8 per share on its first day of listing. The issue price was Rs 340 per share.

The Rs 318-crore IPO was subscribed almost 149 times on the final day of bidding. The IPO received bids for 97.85 crore shares as against issue size of 65.59 lakh shares.

Cinema Hall Stocks Jump on Opening-Up Announcement

Shares of PVR ended 7.3% higher at Rs 1,301.55 and Inox Leisure ended 6.12% at Rs 287.05 per share today.

The Home Ministry issued guidelines permitting more activities in areas outside the containment zones.

This includes opening up cinemas, theatres, and multiplexes like PVR and Inox Leisure with up to 50% of their seating capacity from October 15.

 

Under the Unlock 5.0 guidelines, the central government has permitted reopening of multiplexes from 15 October. Although cinema halls would be allowed to run at 50% seating capacity, this move is a welcome sign for the sector, which was completely shut during the lockdown. Shares of major multiplex operators such as PVR (+7.8%) and Inox (+6.1%) reacted positively to the development. However, movie buffs may have to wait for at least another month to watch big-banner movies (typically launched nationwide) as cinema halls in states such as Maharashtra will remain shut till 31 October.

September Auto Sales See Big Rebound

Car sales in India in the month of September have picked up steadily as the festive season nears. Carmakers sold a total of 293,100 cars in September 2020 as compared to 234,100 cars in the same month a year ago.

This is the highest monthly growth seen in 2020 - higher than the months before the lockdown also.

Traditionally, these months, regarded as the festive months do result in higher sales of cars every year.

Maruti and Hyundai have seen the highest growth while new entrant Kia has also shot to the top of the charts.

Industry leader Maruti posted a 31% year-on-year (YoY) growth in total sales volumes for September. Domestic sales of passenger vehicles grew at an even faster clip of 34%. The rise was supported by a solid 47% growth in the compact segment (which includes models such as WagonR, Swift and Dzire). Among the two-wheeler makers, Bajaj Auto is back on track with a 20% YoY jump in volumes in September after posting a 1% YoY decline in August. Tractor sales too continued their upward momentum piggybacking on a positive rural economy, pent-up demand and a good monsoon. M&M and Escorts saw 17% and 9% higher tractor sales, respectively. However, shares of these companies showed mixed reactions. While Maruti (+0.7%), Bajaj Auto (+4%) and M&M (+0.2%) gained, Escorts was down 2.6%.

Closing bell

Although the Nifty50 showed strength today, it moved within the previous week’s range during this truncated trading week. Traders are expected to wait till the index breaks the previous week's high or low, before taking a directional call. Banks could see action next week as the apex court conducts a hearing (October 5) on loans and interest related to the moratorium.

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🥇 Gold: Rs 50,420 ▲ 0.15% at 6 PM

🥈 Silver: Rs 60,533 ▼ 0.81% at 6 PM

🔀  USD-INR Rate: Rs 73.15/USD ▼ 0.84% 

Dow Jones: 27,781.70 ▲ 1.19% - Sept 30

Nasdaq: 11,167.51 ▲ 0.74% - Sept 30

HAPPY INVESTING!

SEE YOU TOMORROW