Broad Strokes, September 18, 2024
- 8sapience
- BroadStrokes , IPO , SEBI
- 18 Sep, 2024
DCM Shriram Industries Gains 4% as BSE Clears Merger Proposals
DCM Shriram Industries’ shares rose over 4% to Rs 200 after the BSE issued ‘no adverse’ observations regarding its proposed merger with Lily Commercial, allowing the company to proceed with its demerger plan into DCM Shriram Fine Chemicals and DCM Shriram International. The company reported a consolidated net profit increase to Rs 31.36 crore for the June quarter, up from Rs 27.08 crore year-on-year, and its total income rose to Rs 560.46 crore. This performance has contributed to a 30% rise in the stock price this year, outperforming the benchmark Nifty 50’s 15% gain.
US Fed Rate Cut Anticipated Today
The U.S. Federal Reserve is set to initiate its rate cut cycle today, with market expectations leaning towards a 50 basis point reduction, although a 25 basis point cut is also possible. Analysts caution that a 25 bps cut accompanied by a dovish outlook could positively influence market sentiment, but a 50 bps cut might signal economic distress, potentially leading to a decline in stock prices.
Foreign institutional investors (FIIs) have already invested Rs 31,000 crore this month in anticipation of lower rates benefitting banks and NBFCs. The Fed’s decision and commentary will be pivotal in shaping both domestic and global market reactions.
Bajaj Housing Finance Faces Profit Booking Post Rally
Bajaj Housing Finance shares experienced volatility following a strong market debut, initially surging over 136% from its IPO price of Rs 70 to a high of Rs 188.45, before facing a 9% decline due to profit booking. Despite this, the stock remains 149% above its issue price. The IPO was subscribed 63.60 times, reflecting strong institutional interest.
Analysts have mixed views, with some recommending profit booking due to high valuations compared to peers. PhillipCapital maintains a target price of Rs 210, citing strong growth potential in low-risk home loans.
Reliance Infrastructure Shares Hit 20% Upper Circuit Limit
Reliance Infrastructure shares surged 20%, reaching the upper circuit limit of Rs 282.75 after the company announced a significant reduction in its standalone external debt from Rs 3,831 crore to Rs 475 crore, boosting its net worth to Rs 9,041 crore. Year-to-date, the stock has gained 34.23%, following major settlements with lenders such as LIC and ICICI Bank.
Technical indicators show the stock trading above key moving averages, but caution against overbought conditions, with the RSI at 76.72 suggesting bullish momentum.
Aurobindo Pharma Expands Oncology Focus with GLS Pharma Stake Acquisition
Aurobindo Pharma has announced its plan to acquire the remaining 49% stake in GLS Pharma for Rs 22.5 crore, aiming to make GLS a wholly-owned subsidiary by the end of 2024. This acquisition aligns with Aurobindo’s strategy to expand its oncology offerings.
Meanwhile, Aurobindo’s shares fell by 2.09% after the USFDA issued an Establishment Inspection Report (EIR) for its new injectable facility, reflecting market concerns.
IREDA Approved to Raise Rs 4,500 Crore Through QIP
The Indian Renewable Energy Development Agency Ltd (IREDA) has received government approval to raise up to Rs 4,500 crore through a Qualified Institutional Placement (QIP), which will dilute the government’s stake by up to 7%. This move is aimed at strengthening IREDA’s capital base to enhance financing for renewable energy projects.
