FII, DII data: FPIs bought shares worth Rs 61 cr, DIIs added shares worth Rs 305 cr on August 29, Tuesday

Foreign institutional investors (FII) bought shares worth net Rs 61.51 crore, while domestic institutional investors (DII) added shares worth net Rs 305.09 crore on August 29, 2023, according to the provisional data available on the NSE.

For the month till August 29, 2023, FIIs sold shares worth net Rs 17,152.87 crore while DIIs bought shares worth net Rs 19,310.95 crore. In the month of July, FIIs bought shares worth net Rs 13,922.01 crore while DIIs sold equities worth net Rs 1,184.33 crore.

“The market is moving in a range and we expect this trend to continue given the data-packed week and monthly derivatives expiry. Further, consistent selling by FIIs and poor monsoon in the month of August raised concern among investors, thus keeping the upside limited,” Siddhartha Khemka added.

On Tuesday, domestic indices ended in positive territory. The Nifty shut shop in the green at 19,341.4, up 0.18% and the Sensex ended trade at 65,075.82, up 0.12%. Realty, metal and power stocks were in the limelight with the Nifty Realty Index clocking over 1% gains. The top gainers included UPL, Hindalco Industries, Adani Ports, Hero MotoCorp and Tata Steel while the top losers for the day included Bharti Airtel, HUL, Axis Bank, Dr Reddy’s Laboratories and Reliance Industries.

Foreign institutional investors (FII) or Foreign portfolio investors (FPI) are those who invest in the financial assets of a country while not being part of it. On the other hand, domestic institutional investors (DII), as the name suggests, invest in the country they’re living in. Political and economic trends impact the investment decisions of both FIIs and DIIs. Additionally, both types of investors  –  foreign institutional investors (FIIs) and domestic institutional investors (DIIs) – can impact the economy’s net investment flows.

Rupee remains under pressure; USDINR expected to trade sideways in 82.20-82.80 range

By Gaurang Somaiya

Rupee in the last couple of sessions of the previous week came under pressure; witnessed sharp selling and fell to the lowest level in six weeks. Triggers for the rupee came from global factors, primarily the FOMC meeting minutes and better-than-expected economic data from the US. The Fed governor and its officials suggested that at the meeting minutes suggested that while a slower approach might be necessary, policy tightening is not off the table. The dollar rose against its major crosses after the release of the meeting minutes. At the same time, private jobs data also came in on the higher side. Private payrolls rose by 497,000 jobs last month, up from a downwardly revised level of 267,000 in May.

Dollar rose sharply against its major crosses, the FOMC meeting minutes mentioned that officials and the Fed Chairman reinforced the prevailing view that inflation still had some distance to cover before reaching the target of 2%. Probability of further rate hike expectation started to build in after robust private payrolls data. This started to increase expectations that the non-farm payrolls data could show the economy adding further jobs in June. But, non-farm payrolls showed the US economy added 209,000 jobs last month, the smallest gain since December 2020. The U.S. economy added the fewest jobs in the last couple of years in June, but persistent wage growth pointed to tight labor market conditions that most certainly built expectations that the Federal Reserve will raise interest rates at the July meeting.

This week, US CPI will be important to watch; expectation is that the number could remain subdued and that could keep volatility in check for the greenback. Broadly, we expect the dollar to trade with a positive bias following better-than-expected economic numbers from the US and on increased expectation that the Fed will be raising rates at its July meeting.

Major crosses the Euro and Pound gained as inflation in both these economies continued to remain elevated. Pound has outperformed in comparison to both these currencies as there is expectation that the Bank of England could continue to raise rates further. Market participants are pricing in another 150 bps of tightening by the middle of next year as inflation remains sticky. This week, from the Eurozone, German economic sentiment number and from the UK, focus will be on the employment, GDP and industrial production number. Better-than-expected data could extend gains for the pound.

(Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing)

Adani Group deployed more than Rs 2.36 trillion worth equity as of FY23

Adani Group deployed more than Rs 2.36 trillion worth equity by the end of FY23, which was more than half of its total gross assets, through various strategic initiatives. The deployment was from FY14 and had the highest-ever cash balance of Rs 42,115 crore as of FY23-end.

The cash balance was higher by Rs 1,764 crore from the end of last fiscal and the group had a net debt of Rs 1.87 trillion as of FY23-end. The total equity deployed has increased to 55.77% of the total assets, which stood at 40.16% as of FY19-end, the group said in a credit report released on Thursday.

“The portfolio companies diligently focused on bolstering their financial standing, ensuring a robust foundation for their ambitious projects,” it added.

The gross assets to net debt stood at 2.3 times and net debt to equity stood at 0.8 times as of FY23-end. The group’s portfolio companies’ debt coverage ratio improved to 2.02 times in FY23, compared with 1.47 times in FY22.

Its free funds flow plus cash for FY23 was at 2.72 times against average debt maturity cover of 6.55 years, thus eliminating refinance risks.

Through a 10-year equity programme, with long-only global investors formulated in 2016, the Adani portfolio has attracted over $9.5 billion (does not include the recent stake sale in Adani Power to GQG Partners) since 2019. This programme supported strategic priorities, including pre-payment of margin-linked share-backed financing.

The promoter-level entity has generated Rs 30,900 crore (does not include recent stake sale in Adani Power to GQG Partners) through secondary market transactions since March 2023.

On Wednesday, Adani Group said it posted a 42% on-year rise in Ebitda at Rs 23,532 crore for the first quarter of this fiscal, the highest in a quarter, mainly driven by its infrastructure and utility segment. The company had earned nearly the same profit for the full year of 2019, the group said in a results compendium of its listed companies.

This lends a “high-degree of stability and multi-decadal visibility and predictability”, it said, adding, the core infrastructure and utility segment generated Ebitda of Rs 20,233 crore and accounted for 86% of portfolio-level Ebitda.

Chandrayaan-3, AdityaL1 and Now Gaganyaan: ISRO is on fast track to be global leader

– By SM Vaidya

Indian Space Research Organization (ISRO) has announced the first of the tests for Gaganyaan series on 21st Oct 2023. This is a beginning of a new era for India as Gaganyaan envisages 3 astronauts to be taken to 400 kms and will stay at this orbit for 3 days before crew comes down safely and lands on Indian waters using parachutes and floats. I am sure you understand that it is not easy to take human beings in orbit and make them land safely for many reasons. All our last 4 decades of success was with various payloads but never human beings. This is going to be a game changer and soon aKer the 3 test flights planned at this stage, we shall have a full human rated flight with 3 astronauts by the end of 2024. In the next 12-15 months we are going to see series of flights and ground tests that will qualify our launch vehicle to human rating, Crew module where earth like conditions will be maintain for crew and Low and High-altitude escape modules, Service Module-propulsion module, deployment of parachutes and finally safe landing on India waters.

Launch Vehicle for Gaganyaan will be LVM-3 which has conducted many missions so far but for human rating, a lot of new additions have been made while manufacturing, inspection, testing and certification… Many times, even after taking a lot of efforts and stabilizing manufacturing processes, we land up in minor or major deviations and such deviations are debated- computer simulations or lab simulations are conducted with additional tests and if found satisfactory, it is accepted for a particular mission. For Gaganyaan no major deviations are accepted, and articles are kept aside even if it is very expensive and may delay schedule. Adaptation and recalibration of operators, technicians and inspectors is being done at much higher frequencies than in normal circumstances. Periodic awareness programs are conducted so no complacency sets in in the system. Cleanliness while fabrication of parts, it’s assemblies and tests are almost like an operation theater and every aspect is monitored and noted.

Till date we were launching payloads, and they were taken to desired orbits across the earth of Moon, Mars and now we are attempting to go near the Sun and be at L1 and orbit for smooth uninterrupted analysis. These objects were mechanical or electronic systems and if you give them power and most preferred operating conditions by coating them suitably or giving them enclosure these machines were operating well. Also, once the mission is over, they will be sent to another orbit as debris in the sky/ universe. Now that we are planning to humans in space additional conditioning and enclosures are required to be designed- built and qualified. These are called Crew module and Service module. In crew module astronauts will stay for the intended period and will perform the task assigned, where as service module will provide them the environment, and will take charge of all the operating parameters like temperature, humidity, shocks, vibrations, food, exhaust, toilets, relaxation….It will not only provide comfort and other means to orbit safely but also will provide, emergency ejection or landing systems at every stage. It also must bother for external conditions and navigation, onboard controls, communication with ground, etc. for smooth running like normal payload in its mission mode.

Astronauts when trained are made aware of all such systems which they will be monitoring while performing various experiments when in microgravity or low gravity zone. What will they eat, how will they breathe, where will they sleep or take rest, how is their schedule for 24 hrs monitoring, how will they answer to natural calls, what will they wear and so many activities which we do every day are required to be redefined when you are in orbit. Such simulation chambers for them to give micro gravity, large shocks and vibrations and acceleration is not easy and secng up of such facilities itself a major project and to build and operate.

The next complexity is once a mission is accomplished or duration of stay in orbit this crew must start a journey back to earth. When we take off from earth, we are going against gravity, we are going to thinner air, we are going towards vacuum and low temperatures. Over a period of last 4 decades, we have learned and understood this journey like Abhimanu was aware of how get into Chakravyuvha but return was not learned by him. So is our case, when we climb up gravity even though in reverse direction helps in breaking us or controlling us and whatever force we apply can be controlled. When we are trying to step down from a hill, gravity forces us to move down faster and a small mistake in our calculation may make you fall. It is tiresome when you are climbing up, but one needs to be very careful while stepping down for every foot you are stepping. As we are coming to denser air frictional force is very high and that generates tremendous heat. Racing cars, bullet trains, aircraKs thus have an aerodynamic profile to minimize air resistance and heating up, when we are in free fall conditions it is difficult to navigate the right and most advantageous path so like while we landed on Moon, we used reverse thrusters will be deployed during this journey and speed will be controlled. If Insulation tiles, speed to descent, angle of trajectory… if any of these other parameters are not monitored and controlled we will be heading towards a major disaster. Thus, this portion of the mission is most critical and needs to be monitored and calibrated during the first 3 test flights. Fortunately for us on earth we have an atmosphere unlike the moon and hence we will come close to earth parachutes will be deployed and since we are planning to land on water floats will also be deployed to have smooth landing and not crash landing. However, location where crew will land plus its weight will make demand on parachutes and floats a lot more demanding than normal circumstances. Precision in landing will come from navigation and onboard controls and communication system systems.

Each one requires a good amount of power and managing all this with 3 lives is a big challenge ISRO is ready to take and start demonstrating from this 21st Oct 2023 during Navratri days and while I have huge confidence, I pray goddess to give us and enlighten us at these 3 stages so that we can take or friends safely and bring back them amongst us aKer accomplishment of the mission. It is going to be a success as our scientists have worked very hard and every possible scenario has been mapped.

(SM Vaidya is the Advisor- Technical, at Godrej & Boyce Mfg Co Ltd)

(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)

Brightcom CEO & CFO barred from key posts in any firm

The Securities and Exchange Board of India (Sebi) on Tuesday passed an interim order barring Brightcom Group (BGL) chairman and CEO Suresh Kumar Reddy and chief financial officer Narayan Raju from holding key managerial positions in any firm. Reddy has been barred from the securities markets for a year.

It has also barred GQuant founder Shankar Sharma, along with Raju, from selling any shares held in BGL.

During the fourth instance, 15 million warrants were allotted to Sharma at Rs 37.77 per warrant, which were converted to equity shares in March 2022 and listed on the exchanges in April 2022.

Responding to Sebi’s order GQuant founder Shankar Sharma said, ” We have received the reconciled remittance data from the company yesterday, matched with our records, and are submitting the required information tonight itself to Sebi . We have paid a total of `56.65 crore towards our 15 million at a price of Rs 37.7 per warrant (Sebi formula price), which is the exact amount payable by us.”

In the case of 22 other allottees who were allotted shares worth `245.24 crore, the firm received just `52.51 crore, with `192.73 crore was either not received by the company or was routed back to the allottees through multiple layering of transactions.

The market regulator had received complaints pertaining to the preferential issue of shares to entities connected directly or indirectly to Brightcom, and lending of the money raised in the preferential issues as loans and advances to its subsidiaries.

“It was further alleged that proper disclosures were not made in the annual report of the company in respect of utilisation of the proceeds of the preferential issues,” said the interim order.

Sebi has directed the company to ensure that statutory auditors P Murali & Co as well as its predecessor PCN & Associates, or any of their former partners, are not engaged with the company till further notice, alleging that they helped the firm cover up for its fraudulent practices.

According to the interim order, Reddy and Raju submitted fabricated bank account statements to the regulator to show they did not receive any part of the proceeds.

Sebi passed the interim order as it believed an urgent intervention was warranted after its findings showed that manipulations carried out by the company as well as the 24 other noticees as regards the preferential issue.

The noticees have 21 days to file their replies to the order.

Nifty may slip till 18,900, Bank Nifty may break below 44,800 level

By Anand James

Last week ended with the 19,300 region attempting to force a pause to the liquidation spree that unfolded in the last hour. This needs to be read with the fact that we had begun last week with overbought signals ringing in several indicators and sectors. It is true that 72% of the Nifty50 stocks are either nearing or in the overbought region, with IT, Auto and Banks being the top 3 sectors by weightage in Nifty that are overbought. However, overbought signals seldom signal a reversal in a trending market, as much as they do in a sideways market.

Bank Nifty on the other hand is already enroute a correction as signal by an evening star pattern registered a few days back in daily charts. However, the down moves have not been momentous enough as yet. This is because the breakout was too recent to make the evening star potent enough as a reversal, raising the prospects of the ongoing moves to slip into a flag, therewith a bullish continuation pattern. This makes entry into bank nifty a bit dicey, early on in the week, urging us to wait for a break below 44,800 before playing downsides with more freedom.

Amidst all this, VIX, which had started to rise from near record levels, adding weight to chances of a correction, slipped 2.6% on Friday. This is hardly a template that bears would have liked to launch an assault on, but, we will closely watch the progression of VIX next week.

Meanwhile, USDINR swung higher viciously, breaking above a suffocating trading range that had held prices subdued for over a fortnight. This would be the 6th time since October that we would be seeing USDINR attempting to surge past the record peaks. Hence, we are not excited about the continuation of ongoing uptrends, until a clear break above 83.25 is seen. Nearest support is seen at 82.41.

(Anand James, Chief Market Strategist at Geojit Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)

Top global cues to know before market opening on August 29

The Asian markets have opened on a positive note after US markets ended in the green and The GIFT Nifty indicates a flat opening for the Indian indices.

The US markets kick started the final week of trading on a positive note. The Dow Jones Industrial Average ended up 213.08 points, or 0.62%, to close at 34,559.98. The S&P 500 shut shop at 4,433.31, up 0.63% and the Nasdaq Composite moved up 0.84% to finish the session at 13,705.13. All the three indices have lost significant ground in August thus far.

However, all eyes would continue to be data this week. Investors will be watching out for the reading on personal consumption expenditures index. It is expected to be out on Thursday, followed by fresh non-farm payroll data Friday morning.

The US Treasury yields also ended lower as investors remained focused on remarks from Jerome Powell which signaled the possibility of more interest rate hikes to tackle inflation.

Prashanth Tapse, Senior VP (Research), Mehta Equities believes that “Markets could display a mixed trend in early Tuesday trades amid fluctuation in the Gift Nifty index even as US indices rose sharply in overnight trades while other Asian gauges, too, are trading on firm ground. For markets to bounce and sustain at higher levels, FIIs buying participation will be a key factor. However, the FII camp sold shares to the tune of Rs 1393 crores in yesterday’s trade, implying the pessimism amongst the overseas investors amid higher US bond yields and likely uptick in interest rates which could further drag the global economic growth. On the stock front, shares from the Reliance Industries pack could be in the spotlight after the company’s AGM yesterday. Technically, Nifty’s upside is likely to be capped at 19437-19589 zone, while caution will continue to be the buzzword as long as the index is trading below the 19589 mark.”

Indian rupee flat amidst market uncertainty

The Indian rupee faced a marginal correction of 6 paise after making a positive opening and is trading at 82.71 against the US dollar during intraday on Thursday. The currency opened at 82.65 and is currently trading in the range of 82.60 to 82.85 against the US dollar. The rupee had ended the previous trading session at 82.63 on Wednesday.

“Recovery attempts were limited to 82.65 with the moves remaining lacklustre. Continue to expect dips to 82.5 followed by upswings, but unless 82.8 gives away, expect renewed attempts to break down, aiming 82.2,” said Anand James, Chief Market Strategist at Geojit Financial Services.

“The USDINR 26 September futures contract traded within a confined range, positioned below its 82.95 moving average support on the daily chart. Negative MACD divergence and an RSI below 50 underline the weakening trend. With notable resistance around 82.95, breaching and sustaining above this level is crucial for strength; otherwise, a revisit of 82.66-82.45 support is likely. Watch 82.66-82.95 for potential positions as a breakout will guide the next directional move,” said Rahul Kalantri, VP Commodities, Mehta Equities.

Jio Fin: More digital focus; Management to strengthen team to fuel the company’s growth

Jio Financial Services, which has been spun off from RIL, was listed on August 21, ahead of its original schedule. The filed documents indicate that its operational scope might encompass diverse areas such as consumer and merchant lending, a payments platform, insurance broking, asset management, and other non-banking financial activities. The management is relying on bolstering the team and leveraging digital platforms to drive the company’s growth. With a net worth of Rs 1.1 trillion, the company’s OCI (other comprehensive income) gain stands at Rs 671 billion, while the investment cost in group companies totals Rs 154 billion. The calculated exchange-derived price is Rs 262 per share, factoring in the valuation of the stake in RIL and approximately a 2x multiple on the core price-to-book ratio.

The Information Memorandum outlines Jio Financial Services’ key business areas: retail lending, merchant lending, payments bank operations, payments solutions, and insurance broking. Consumer lending initially targets financing for retail-sold consumer durables, with plans to expand to secured loans. Merchant lending prioritises grocery, digital, fashion, and pharma merchants. The SME segment focuses on working capital loans. Jio aims to enhance merchant-focused payment platforms, strengthen Jio Payments Bank, and establish insurance broking services. Additionally, a joint venture with BlackRock is set to launch an AMC business alongside potential other ventures. The shareholding of Jio FS replicates that of its erstwhile parent, RIL, with promoters holding 46% stake. KV Kamath is the chairman. While teams are being built across segments, management is planning to intensely focus on digital platforms across verticals. Its asset-backed balance sheet, strong credit rating and promoter backing would also help get access to funds at cheaper rates, especially after merger of HDFC Ltd with HDFC Bank.

ATF price hiked by steepest ever 14%

Jet fuel or ATF price on Friday was hiked by the steepest-ever 14 per cent — the third straight increase, while the commercial cooking gas rate was cut by Rs 157.5 per cylinder in line with divergent trends in international benchmarks. Aviation turbine fuel (ATF) price was increased by Rs 13,911.07 per kilolitre, or 14.1 per cent, in the national capital to Rs 1,12,419.33 per kl, according to a price notification of state-owned fuel retailers.

Rates, which vary from state to state depending on the incidence of local sales tax or VAT, have been increased on firming up of global prices in the last couple of months. The hike comes on the back of an 8.5 per cent or Rs 7,728.38 per kl increase effected from August 1. Prior to that, rates had gone up by 1.65 per cent or Rs 1,476.79 per kl on July 1.

Saudi contract price (CP), the benchmark used for pricing of LPG, has reduced since peaking in March and the same is reflected in domestic prices, industry officials said. Globally, jet fuel prices have increased in line with the firming up of global crude oil prices, necessitating the hike in ATF rates. The price of domestic LPG — used in the kitchen for cooking purposes — remained unchanged at Rs 903 per 14.2-kg cylinder in the national capital. Rates were last cut by Rs 200 on August 30.

State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise cooking gas and ATF prices on the 1st of every month based on the average international price in the previous month. Petrol and diesel prices continued to remain on freeze for a record 17th month in a row. Petrol costs Rs 96.72 per litre in the national capital and diesel comes for Rs 89.62 per litre.

State-owned fuel retailers are supposed to revise petrol and diesel prices daily based on a 15-day rolling average of benchmark international fuel prices but they haven’t done that since April 6, 2022. Prices were last changed on May 22, when the government cut excise duty to give relief to consumers from a spike in retail rates that followed a surge in international oil prices.