Markets closed higher compared to yesterday’s closing point. The rise was mainly due to the rise in major IT stocks.
IT stocks and metal stocks rose the most today. Consumer durable stocks and FMCG stocks fell the most.
Global markets: US markets rose on Thursday. Most Asian markets traded mixed on Friday. Most European markets rose (as of 6 pm IST).
News
India’s forex reserves rose $12.42 billion to a record high of $729.33 billion for the week ended on 21 August.
India’s Industrial Production rose 6.70% in July compared to 7.30% in June. The July growth was supported by 7.30% growth in the manufacturing sector and 8.70% increase in the electricity and gas supply sector.
Jio Platforms, Paras Healthcare and Bharat PET along with 4 other companies received SEBI approval for their IPOs.
SEBI extended the implementation deadline for the new framework for exchange traded funds to 7 September from 1 September, based on the feedback from the stock exchanges.
IPO Corner
Lumino Industries IPO was subscribed 4.87 times on day 2. Retail subscription: 6.50 times. The IPO will close for subscription on 31 August.
ESDS Software Solutions IPO was subscribed 2.10 times on day 1. Retail subscription: 2.69 times. The IPO will close for subscription on 1 September.
Tempsens Instruments (India) Limited listed at Rs 634 on NSE, a premium of 111.33% over its issue price and closed 96.87% higher.
Stock Updates
M&M: expanded its Battery-as-a-Service financing programme across its Electric Origin SUV range. Under this plan, customers pay for the battery separately, which reduces the vehicle’s upfront price.
Power Grid: acquired Fatehgarh II Transmission Ltd after winning the project through a competitive bidding process. The project includes installing two synchronous condensers at the Fatehgarh-II pooling station along with related infrastructure.
Tata Steel: invested another $140 million (about Rs 1,340 crore), in wholly owned overseas subsidiary T Steel Holdings Pte Ltd. This is part of the previously approved additional investment of up to $2 billion.
ICICI Prudential AMC: promoter, Prudential Corporation Holdings, sold a 2% stake in the open market to meet the minimum public shareholding rules. The promoter group’s holding fell from 87.60% to 85.60%.
Hero MotoCorp: bought additional shares in Ather Energy for around Rs 1,758 crore. Its holding in Ather increased to about 32.8% on a fully diluted basis.
Aurobindo Pharma: USFDA completed an inspection of subsidiary Apitoria Pharma Pvt Ltd’s Unit-VI API facility in Andhra Pradesh with three observations. The company said the observations are procedural in nature.
Word of the Day
Sunset Clause
It is a method using which a rule is made invalid after a certain period.
Example: a company’s founder signs a non-compete agreement when his company gets acquired by another company. This agreement includes a sunset clause of 3 years.
This means the founder cannot compete with the company he sold. And, this agreement will stop being applicable after 3 years.
So after 3 years, he can start another company and compete against his earlier company.
Sunset clauses can be found in many different kinds of agreements and regulations.
6 Day Course
Theme: quarterly reports
Day 5: Friday
Besides the mandatory filings, there are disclosures unique to each industry which also needs to be published.
For example:
Banks and lenders: Non-Performing Assets (NPA), Net Interest Margin (NIM), Capital Ratio (CAR), etc.
Insurance sector: solvency ratio, combined ratio, persistency ratio, etc.
Telecom sector: Average Revenue Per User (ARPU), subscriber churn, spectrum fee liabilities, etc.
Pharma sector: regulatory inspection updates, R&D spending, drugs approvals, etc.
Auto sector: companies are required to reveal the number of vehicles they are selling and compare quarter on quarter.
Likewise, each sector has its own set of mandatory quarterly numbers and reports.
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Featured Question
Q. “Perpetual bonds AA. Category, are giving good returns than MF , Is it a good option to buy in today’s market situation if not what other options”
In the world of bonds, the interest received usually has a very direct link to the risk involved.
Often, if the interest rates are high, the risk would be high as well.
Bonds offer fixed returns and that makes them seem attractive and even safe.
But the fixed returns greatly depend on the ability of the bond issuer to pay back.
Higher interest is offered whenever the risk of default is higher.
This isn’t to say that they are bad investments. They can be good investments if an investor does his research well.
Just be aware that they are not risk-free options giving higher returns.
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