Broad Strokes, August 22, 2024
- 8sapience
- BroadStrokes , Acquisition , Promoter , IPO
- 22 Aug, 2024
💎 Kalyan Jewellers Promoter Increases Stake
Kalyan Jewellers’ shares surged over 7% following the announcement that promoter Trikkur Sitarama Iyer Kalyanaraman is acquiring a 2.36% stake from Highdell Investment for approximately Rs 1,300 crore. The acquisition occurred through five block deals at Rs 535 per share. Here are some highlights:
- Promoter and promoter group’s stake in Kalyan Jewellers increased from 60.59% to 62.95%.
- The stock has gained 160.4% over the past year.
- It has a 61% year-to-date gain.
- Kalyan Jewellers reported a 24% year-on-year increase in net profit for the June quarter.
- 5 out of 7 analysts recommend the stock as a ‘Strong Buy’.
🍕 Zomato Stock Rises on Paytm Acquisition News
Shares of Paytm surged over 5% following the announcement of its sale of the entertainment ticketing business to Zomato for Rs 2,048 crore, with brokerages raising their target prices for Paytm. Key points include:
- StoxBox suggests short-term targets of Rs 615 for Paytm and Rs 285 for Zomato.
- Positive technical indicators for both stocks.
- CLSA and Citi view the deal favorably for Zomato.
- Expected growth in Zomato’s event and travel booking sectors.
- Launch of Zomato’s new “District” app to expand its “going out” business.
🔋 IREDA Shares Surge on Fundraising Plan
Shares of the Indian Renewable Energy Development Agency (IREDA) surged nearly 9% following the announcement to raise up to Rs 4,500 crore through various funding options. Highlights:
- Stock has skyrocketed 700% since its IPO in November 2023.
- 30% year-on-year increase in net profit to Rs 384 crore.
- 32% rise in revenue to Rs 1,502 crore for the June quarter.
- Analysts have mixed ratings: some suggest a ‘Buy’ with a target of Rs 330, others a ‘Sell’ with a target of Rs 130.
- Concerns over valuation and market dynamics.
💼 Orient Technologies IPO Sees Strong Demand
The IPO of Orient Technologies has seen robust demand, being oversubscribed 15.45 times by the second day of bidding. Key highlights:
- Company aims to raise Rs 214.76 crore.
- Retail investors subscribed 22.92 times their allotted quota.
- Non-institutional investors subscribed 17.71 times.
- Proceeds to be used for acquiring office premises and enhancing IT infrastructure.
- Shares are expected to list on August 28, 2024, with a grey market premium indicating potential listing gain.
🛠 Shyam Metalics Shares Surge on UBS Coverage
Shares of Shyam Metalics and Energy surged 11% to a record high after UBS initiated coverage with a “Buy” rating. Notable points include:
- Target price of Rs 1,200 indicates a potential upside of 57%.
- Strategic shift to value-added offerings like battery-grade aluminum foil.
- Rs 10,000 crore capex plan for FY22-27.
- Anticipated EBITDA growth of 39% and PBT growth of 50%.
- Reported a 37% increase in profit and an 8.4% rise in revenue for the latest quarter.
💹 Fed Officials Signal September Rate Cut
The Federal Reserve is signaling a likely interest rate cut in September, as indicated by the minutes from its July meeting. Key highlights:
- Significant majority of officials support easing monetary policy.
- Positive reaction from financial markets.
- U.S. stocks and Indian indices like Nifty and Sensex rising.
- Multiple rate cuts expected by year-end.
- Anticipation of Chair Jerome Powell’s speech at the Jackson Hole symposium.
🏦 FIIs Reduce Exposure in Largecap Stocks
Foreign Institutional Investors (FIIs) significantly reduced their exposure to large-cap financial stocks in the first half of August. Key points include:
- Approximately ₹14,790 crore offloaded due to rising credit costs.
- Notable companies affected included Kotak Mahindra Bank and Adani Enterprises.
- Bank Nifty index declined by 3.05% over the past month.
- Broader Nifty index saw a modest increase.
- DIIs remained active buyers, indicating mixed market sentiment.
📈 Stocks with Notable Long and Short Buildups
In the latest trading session, several stocks exhibited notable build-up patterns. Highlights include:
- Long Buildup: Indian Hotels (+3.19%) and Abbott India (+4.77%).
- Short Buildup: Tata Motors (-1.01%) and Power Grid Corporation (-1.01%).
- Long Unwinding: TCS and Sun TV.
- Bullish bets on IPCA Labs (+1.6%) and Divis Lab.
- Nifty futures maintaining a bullish structure with significant open interest at the 24,700 level.
📉 Nucleus Software Stock Declines after Buyback Announcement
Nucleus Software Exports shares declined over 7% after announcing a buyback. Key takeaways:
- Up to 448,018 equity shares at Rs 1,615 each, totaling Rs 72.35 crore.
- Decline followed a significant rally of 30%.
- Recent financials: 5.5% year-on-year decrease in consolidated revenue to Rs 195.4 crore.
- 43.5% plunge in profit after tax to Rs 30.2 crore for the June quarter.
- In contrast, Mphasis shares rose 4% and Zen Technologies reached an all-time high.
🚢 BEML Stock Gains on MoUs with Indian Navy
BEML’s stock surged over 3.5% following significant MoUs with the Indian Navy and Malaysia’s SMH Rail. Key points include:
- Partnerships aimed at enhancing marine engineering capabilities.
- Focus on indigenous marine equipment under India’s Aatmanirbhar Bharat initiative.
- Stock has rallied 38% year-to-date and 89% over the past year.
- Significantly outperforming the benchmark Nifty index.
🛡 Paras Defence Secures License for Production
Shares of Paras Defence and Space Technologies surged 5% after receiving an industrial license. Highlights:
- License to manufacture various defense products, including infrared and thermal imaging equipment.
- Valid for 15 years, enhancing production capabilities.
- 66% stock price increase over the past six months.
- Bharat Electronics secured orders worth Rs 695 crore.
- Dabur India announced a new manufacturing plant, leading to a 2.04% rise in shares.
