In Friday’s session, Nifty witnessed its biggest drop in almost a month, amid global cues, after US President-elect Joe Biden’s USD 1.9-trillion Covid-19 relief plan triggered concerns over an increase in corporate taxes.
We expect intraday range could be 14,183-14,698 with sideways to negative momentum while broader range could be 13,991 to 14,834.
Bank Nifty Intraday Outlook:
In Friday’s trading session, Bank Nifty lost 0.84%. PSU Banks witnessed a steep fall of 2.05% and Private banks fell 0.96%.
We expect intraday range could be 31,692-32,748 with sideways to negative momentum & broader range could be expected between 31,399 to 33,052 zone for this week.
Daily Market StatisticsMajor Global and Domestic Economic EventsResults Calendar
Indian Railway Finance Corporation (IRFC), the financing arm of Indian Railways is all set to hit the primary markets to raise INR 4,633.3 crores through IPO. This issue will constitute of up to 13.64% of the post issue paid-up equity share capital of the company.
The issue includes a reservation of
equity shares worth INR 50 lakh for subscription by eligible employees.
Strengths
Monopoly in the market
Experienced management
team
Stable growth in
revenue stream
Great credit ratings:
CRISIL – AAA/A1+, ICRA – AAA/A1+, and CARE – AAA/A1+. (Long term / short term)
Key role in Indian
Railways growth
Valuation
The company is
getting listed at 12 months trailing P/E of 14.2 at upper price band. As IRFC
has monopoly in the market, it can’t be compared to other NBFCs.
Utilization of Funds
Background highlights of the company in brief
Indian Railway Finance Corporation (IRFC) is a financing arm of Indian Railways. It was incorporated on 12th December, 1986 as a wholly owned Government entity.
IRFC is a Schedule ‘A’ Public Sector Enterprise under the administrative control of the Ministry of Railways, Government of India. It is also registered as Systemically Important Non–Deposit taking Non-Banking Financial Company (NBFC – ND-SI) and Infrastructure Finance Company (NBFC- IFC) with Reserve Bank of India (RBI).
Its principal function is to raising and acquiring funds for Indian Railways to attain rolling stock assets like wagons, coaches, electric units, trucks, locomotives). It also looks after financing for the company’s improvement, expansion, and assets management.
IRFC also has a presence in lending activities and has been lending to various entities in Railway sector like Rail Vikas Nigam Limited (RVNL), Railtel, Konkan Railway Corporation Limited (KRCL), Pipavav Railway Corporation Limited (PRCL) etc.
IRFC funds about 79 per cent of the railways’ wagons, coaches and about 85 per cent of engines that make up the rolling stock.
IRFC’s has also been diversifying its borrowing portfolio in terms of instruments, markets and investors which has led to the Company, meeting the targeted borrowings year after year, through issue of both taxable and tax-free bonds, term loan from banks/financial institutions besides off shore borrowings, at competitive market rate.
The total value of Rolling Stock Assets financed by IRFC for the year 2019-20 was 33,544 Crs.
The company has maintained the highest possible credit ratings for an Indian issuer both for long term domestic and short term borrowings and have received the highest credit ratings from CRISIL – CRISIL AAA and CRISIL A1+, ICRA – ICRA AAA and ICRA A1+, and CARE – CARE AAA and CARE A1+, respectively.
In Fiscals 2017, 2018 and 2019 (revised estimate), the company was responsible for financing 72%, 93% and 82%, respectively, of the Indian Railway’s total rolling stock.
Briefing about directors & key managerial
personnel
During the last week, prices of base metals
like zinc, lead, and copper rose as the bulls made a comeback. Whereas, the
prices of gold and silver hit the bottom by dipping 2% and 2.3%. Gold slipped
below $1,900 mark during the week to close at $1,891.3 and silver slipped below
its $27 to close at $26.645. In the initial days of the week, both the metals
were on a rising trend due to the political uncertainty in the US Senate. In
addition, numbers of the US ADP Non-Farm Employment Change fell by 123,000 for
the month of December 2020, which is much lower than the expectations of
+60,000. That too helped in the uplift. However, as the US Political tensions
subsided a bit after the Democrats won two seats in the Senate, the Gold prices
made a sharp decline.
As per the media reports, Pfizer Inc. and
BioNTech’s COVID-19 vaccine proved effective in the UK and South Africa against
a key mutant of the new variant of corona virus, which is highly transmissible.
This news also weighed on the gold and silver prices. Along with these factors,
the US Treasury yields soared above 1% earlier in the week, which also had a
negative impact on gold and silver prices. The US Dollar traded higher at 89.85
against the basket of six currencies.
During the current week, important economic
data such as US’ 10-year bond auction on 12th January, Eurozone’s
Industrial Production for the month of November 2020 and US’ 30-year old
auction on 13th January, US’ unemployment claims on 14th January,
UK’s GDP for the month of December 2020, UK’s industrial production and
manufacturing production for the month of November 2020, and US’ industrial
production for the month of December 2020 on 15th January, will be
released. Investors need to keep an eye on these data for the week as they can
have an effect on both, base metals commodities and bullion market commodities.
In the current week, we expect gold in COMEX
market to be in the range of $1,922 to $1,769, while silver is expected to be
in the range of $26.8 to $19.6. Whereas, as per our prediction for bullion
market traders, in gold contract futures, we advise to enter at the price of
48,100 with a stop loss of 46,955 and a target of 51,300.
In Monday’s trading session, Bank Nifty lost 0.27%. Private Banks and PSU Banks lost 0.39% and –1.45% respectively. We expect intraday range could be 31,607-32,452 with sideways to positive momentum & broader range could be expected between 31,319 to 32,737 zone for this week.
Nifty Intra Outlook:
Nifty rose by 0.98% in yesterday’s session after the results session started on a positive note, and India commenced COVID-19 vaccination. We expect intraday range could be 14,253-14,626 with sideways to positive momentum while broader range could be 14,149 to 14,831.
Daily Market StatisticsMajor Global and Domestic Economic EventsDisclaimer
During the first week of the calendar year
2020, market has remained volatile, by steeping to the low levels of 48,174 and
touching the high of 48,616. At the start of the week, both the indices were
soaring, as the investors sentiments were boosted supported by the positive
global cues, such as, US unemployment claims, Manufacturing Purchasing
Manager’s Index (PMI), Factory Orders, UK’s data including Final Manufacturing
PMI and M4 Money Supply, Euro zone’s Retail Sales, Unemployment change, M3
Money Supply, Services PMI, Producer Price Index (PPI), which came in better
than expected.
As far as domestic data is concerned, Market
Manufacturing PMI and Export numbers for the month of December 2020 were better
than consensus expectations, which also supported the bull sentiments.
Additionally, the Indian government gave approval to two of the COVID-19
vaccines for the country, which is again a positive sign for the economy.
However, the gains were capped after the imports of the country for the month
of December 2020 also increased, resulting into decreasing the trade balance
numbers, which came in below the consensus expectations.
In
the US, on Wednesday, it was decided that Democrats and Republicans will resume
the process of counting the Electoral College votes that will certify
President-elect Joe Biden’s victory. President Trump’s supporters left a rally
where he was speaking and stormed the US Capitol, breaching the Senate chamber
and forcing Congress to halt the certification of the Electoral College vote
for President-elect Joe Biden on Wednesday, Jan. 6, 2021. The global markets
soaked, after the investors feared ahead of this US political uncertainty, and
so did our domestic markets. However, on Thursday morning, the Indian markets
advanced after democrats took control of the Senate, following key elections.
As for the sectoral indices’ overall
performance during the week, Bank Nifty, Nifty IT, Nifty Media and Nifty Metal
were the outperformers, which increased by an average of around more than 0.5%,
out of which, IT and Metal stocks increased by around >1%. However, for the
week, FMCG stocks were the underperformers.
For the upcoming week, we expect higher volatility in the market ahead of the global cues. India VIX has also been on the up-move. We expect Nifty to remain in the range of 13,658 to 14,700, whereas, we expect Sensex to remain in the range of 47,214 to 49,459.
The calendar
year 2020 has been a roller coaster wild ride for the equity markets all over
the world as the once in a lifetime pandemic hit at the start of the year. Nifty
and Sensex took a historic toll of 38.3% and 37.8% respectively in March end
this year as compared to 31st Dec-19 closing, to fall at the levels
of 7,511 and 25,639 respectively. However, no one could have anticipated that
the markets will not only recover the losses of March, but will also give
eye-popping gains by the end of the year. Nifty and Sensex has gained tremendously
by almost 83% each, to end at 13,981.75 and 47,751.33 respectively on 31st
Dec-20 as compared to the steep levels of Mar-20. This year has been full of
events outside the realm of imagination.
Amidst the down-moves, the domestic market had also witnessed a few up-moves in March-April after the RBI stepped in with emergency liquidity support as the Dalal Street wasn’t able to digest the explosive cocktail of deadly pandemic, resultant global meltdown and weak economic conditions of the world. The turbulence was also felt by the global market as Dow Jones suffered its worst hit and US oil futures turned negative for the first time in the history.
ગત સપ્તાહે બેસમેટલ માર્કેટ મા કોપર, લીડ, ઝીંક જેવી કોમોડિટી ઓ મા ઉપર ના મથાળે થી પ્રોફિટ બુકીંગ જોવા મળ્યું હતું જયારે સોના-ચાંદી ના ભાવો મા એક હળવાશ વાળું વાતાવરણ જોવા મળ્યું હતું. તેની પાછળ નું મુખ્ય કારણ તાજેતર મા આવેલા ચાઈના તરફથી આવેલા નવેમ્બર મહિના ના મેનુફેક્ચરિંગ સર્વિસ ઈન્ડેક્સ ના આંકડા જે ૫૨.૧ ની સામે ૫૧.૯ ના સ્તર પર આવયા હતા અને તેની સાથે સાથે ડોલર ઈન્ડેક્સ જે બે વર્ષ ના તળિયે પહોંચ્યો તેને સોના-ચાંદી ના ભાવ ને એક પેરીટી સપોર્ટ પણ આપ્યો હતો. તાજેતર ના એક આંકડા પ્રમાણે ચાઈના તરફથી ૨૦૨૦ મા કોપર કોમોડિટી નો ઈમ્પોર્ટ અંદાજે ૪૦ ટકા નો વધારો નોંધાયો હતો ૨૦૧૯ ના વર્ષ પ્રમાણે જેના કારણે આપણને વૈશ્વિક બજાર મા એલએમી માર્કેટ મા કોપર ના ભાવ અંદાજે $૮૦૦૦/per tonne ના એક સેન્ટિમેન્ટલ આંકડા ને સ્પર્શી ચુક્યો હતો. ચાલુ સપ્તાહે યુરોપ તરફથી મેનુફેક્ચરિંગ ઈન્ડેક્સ ના આંકડા આવશે, તેના સિવાય ઓપેક ની મિટિંગ પણ ૪-જાન્યુઆરી એ રહેશે, ૬-જાન્યુઆરી એ યુ.એસ. તરફથી ADP નોન-ફાર્મ ના ડેટા તેના ઉપરાંત ૭-જાન્યુઆરી એ એક સાથે ઘણા મહત્વ ના ઇકોનોમિક ડેટા જેમ કે યુ.એસ. તરફથી ISM – નોન-મેન્ફ્યુફેકરીંગ , નોનફાર્મ પેયરોલ્સ અને બેરોજગારી ના આંકડા જાહેર થશે તો ચાલુ સપ્તાહ ઇકોનોમિક ડેટા પ્રમાણે બેસેમેટલ કોમોડિટી, બુલિયન માર્કેટ કોમોડિટી બંને પ્રકાર ની કોમોડિટી ના ટ્રેન્ડ માટે મહત્વ રૂપ સાબિત થશે. કોમેક્સ બજાર મા ગોલ્ડ અમારા મત પ્રમાણે $૧૮૨૫ થી લઈને $૧૯૫૦ ની રેન્જ મા રહી શકે જયારે સિલ્વર કોમોડિટી અંદાજે $૨૪.૨૦ થી લઈને $૨૭.૮૦ ની રેન્જ મા રહી શકે છે. ચાલુ સપ્તાહે અમારા માટે પ્રમાણે બુલિયન માર્કેટ ના ટ્રેડરો માટે , ગોલ્ડ ના ફ્યુચર કોન્ટ્રાક્ટ મા ખરીદી કરવાની સલાહ રહેશે જેમાં ૫૦૧૪૦ પાસે એન્ટ્રી લેવાની જેનો સ્ટોપલોસ્સ ૪૯૮૬૦ નો અને ટાર્ગેટ ૫૦૬૭૦ નો રહેશે. અમારા મત પ્રમાણે ગોલ્ડ કોમોડિટી મા ચાલુ સપ્તાહે મા ઓવરઓલ રીતે એક મજબૂતી જળવાય રહેશે અને ઘટાડે પણ ખરીદી ની સલાહ રહેશે.
Total
number of mainboard IPOs in 2020 decreased just marginally as compared to that
in 2019, despite the pandemic that crashed the world’s global markets and
economy badly in the month of March this year. As compared to 16 mainboard IPOs
in 2019, which collectively raised around ₹ 12,362 crs, a total of 15 mainboard
IPOs raised around ₹ 26,639 crs in 2020, which is 2.15x more. In 2019, a total
of 47 IPOs were set to raise funds worth ₹ 51,000 crs, but the companies lapsed
their SEBI approval due to weakness in broader market. However, even 2020 was
not that great of a year for the companies. As a result, we didn’t see as many
IPOs as we expected during the year.
Out
of 15 mainboard IPOs, 6 of them gave more than 50% listing gains, whereas, 4
IPOs gave negative listing gains. Chemcon gave the highest listing gains of
115%, followed by Happiest Minds Technologies Limited which gave 110.8%.Route
Mobile also gave more than 100% of listing gains.
In
2021, more mainboard IPOs are expected. However, if the new COVID-19 strain
spreads at a faster pace, it can hit the broader and domestic markets.
