RBI rule holds back many FIIs from Zomato IPO
Govt kicks off process for mega listing of LIC
RBI report shows it may not raise rates anytime soon
Ant Group may offload 5% stake in Paytm
Now lemme give you a quick glance on the state of the markets.
Dalal Street looked indecisive this morning. Nifty futures traded flat on the Singapore Exchange at 7 hours (IST). Other Asian markets traded mixed amid concerns over economic growth outlook. On Wall Street, Nasdaq ended lower, pulled down by Apple, Amazon and other Big Tech stocks as a drop in weekly jobless claims fed investor concerns about a recent inflation spike.
Elsewhere, the 10-year US Treasury yield is set for a third weekly retreat. The dollar held its advances. Crude oil was headed for the biggest weekly decline since mid-March, hurt by virus flareups in some parts of the world and amid uncertainty over an OPEC+ deal to boost supply.
That said, here’s what is making news?
An untested rule for FIIs is hurting the Zomato IPO, which is now open for subscription. Many early stage foreign investors in Zomato are unable to buy shares in the IPO with RBI telling large MNC custodian banks on the eve of the issue to stick to a 2019 regulation that restricts a foreign investor from holding equity as FDI and as FII in the same company. Tuesday’s RBI note was in response to a clarification sought by banks like HSBC, JP Morgan, Citi and Deutsche, holding shares on behalf of offshore investors.
The much-awaited IPO of LIC moved another step closer to public markets after the Centre on Thursday invited bids for appointing merchant bankers, advisers and a legal firm, initiating the process for the mega listing. The government aims to list LIC by the last quarter of the current financial year. The Cabinet last week approved the IPO, which is set to be the biggest and some estimates show it could raise between Rs 90,000 crore and Rs 1 lakh crore.
Top brokerages have turned gung ho on Infosys after the latter’s Q1 earnings. Foreign brokerages Jefferies, CLSA, HSBC, Citi, Bank of America Securities and Goldman Sachs have all maintained ‘buy’ ratings on the stock post its June quarter earnings, while Macquarie, Credit Suisse and Bernstein have maintained ‘outperform’ ratings. The IT major on Wednesday increased its revenue growth guidance for FY21 to 14-16% from 12-14% earlier.
SpiceJet’s Ajay Singh is putting together a $1 billion war chest for his Air India bid, which will be made through a special purpose vehicle that’s likely to include participation from two US-based funds, according to people briefed on the matter. Singh didn’t respond to queries. The SpiceJet promoter will use a combination of his shares in the listed company and equity that will be allocated to him as part of a planned hive-off of his airline’s cargo business as security to raise about $300 million
RBI is likely to resist the pressure mounted by seemingly stubborn inflation prints and refrain from raising rates anytime soon, assessing that even a near-double-digit expansion of the economy in FY22 will still leave sufficient headroom for further growth without triggering a price spiral. “The pick-up in inflation is driven largely by adverse supply shocks due to disruptions caused by the pandemic, including increases in margins and taxes,” said an RBI study anchored by Deputy Governor Michael Patra.
LASTLY,
China’s largest fintech conglomerate Ant Group is likely to sell at least 5% of its 30.33% stake in Paytm parent One97 Communications before the latter’s IPO slated for November. This is because Paytm wants to bring down Ant’s stake to below 25% to comply with norms by Sebi for listing as a ‘professionally managed company’, sources said.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
Rossari Biotech is in advanced negotiations to acquire a Mumbai-based chemical firm for ?100-125 crore, according to multiple sources in the know.
In what is being seen as a leadership succession plan at Fevicol-maker Pidilite Industries, Sudhanshu Vats has been appointed as deputy MD effective September 1, 2021.
Wipro reported a 21.3% growth for its IT services business in June quarter in constant currency terms, but 7.7% of that came from the acquisition of Capco.
Investor Rakesh Jhunjhunwala has picked up 1.39% stake, or 5.75 crore shares, in SAIL, June quarter shareholding data of the steel company showed.
Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.
That’s it for now. Stay with us for all the market news through the day. Happy investing
