Weekly Market Wrap

Unlisted Share Market Highlights:

• Hyundai Motor India is set to launch its $3-billion IPO on October 14, 2024. Price band announcement expected next week. The IPO will be entirely an offer for sale by Hyundai's South Korean parent company.
• Swiggy has received shareholder approval to increase its IPO fresh issue size to ?5,000 crore from ?3,750 crore. The offer for sale (OFS) remains unchanged at ?6,664 crore. IPO expected soon.
• Swiggy has introduced its 10-minute food delivery service, 'Bolt', in select cities including Bengaluru, Chennai, Hyderabad, New Delhi, Mumbai, and Pune. Partnering with over 2,700 restaurants, Bolt focuses on delivering quick-to-prepare items to customers. This move comes as Swiggy gears up for its IPO, aiming for a valuation of up to $13 billion. The service is expected to enhance Swiggy's market presence by catering to fast-paced consumer demands.
• SEBI approved a ?643-crore settlement in a case involving NSE, former CEO Vikram Limaye, and others. This is the largest settlement in SEBI’s history.
• Jaro Institute of Technology has filed for a ?570 crore IPO, comprising a ?170 crore fresh issue and ?400 crore OFS.
• Fino Paytech Ltd. reported revenue growth to ?1,339 crore in FY-24, up from ?1,149 crore in FY-23. PAT increased to ?81 crore, from ?50 crore in FY-23.
• Indogulf Cropsciences has filed for an IPO to raise ?200 crore via a fresh issue, with ?100 crore allocated for working capital.
• KRN Heat Exchanger and Refrigeration made a strong debut, listing at ?470, a 113.64% premium over its issue price of ?220. The IPO was subscribed 214.42 times.
• Swiggy is testing a premium membership called Rare Club, aimed at affluent individuals with a starting fee of Rs 50,000. This exclusive service offers access to high-end events, such as Coldplay tickets and meet-and-greets, available only to select users. The move comes as Swiggy prepares for its much-anticipated?IPO.
• IG Drones raised $1 million in its initial funding round led by India Accelerator. The startup plans to raise an additional $3 million in the next six months.
• Vikran Engineering has applied for an ?1,000 crore IPO.
• ClayGo Cosmetics, a six-month-old skincare brand, secured $2 million in Series A funding from Unilever Ventures.
• BASIC Home Loan raised ?87.5 crore in a Series B funding round led by Bll and CE-Ventures.
• Dev Accelerator filed its DRHP for an IPO with SEBI.
• The merger of Utkarsh Small Finance Bank with Utkarsh CoreInvest is expected to be completed within the next 12-13 months.
• CRED reported a 66% increase in revenue for FY24, reaching ?2,473 crore. Losses were cut by 41% to ?609 crore.
• InCred Capital plans to raise $50 million with backing from family offices.
• Swiggy Instamart has launched 24x7 free delivery of groceries and essentials across Delhi-NCR.
• Shapoorji Pallonji Group is considering increasing Afcons Infrastructure's IPO size to ?8,000-8,500 crore due to strong institutional demand.
• Vikram Solar has filed papers with SEBI to raise ?1,500 crore through an IPO and offer for sale (OFS) of up to 17.45 million shares.
• Matrix Gas & Renewables aims to raise ?10-12 billion via IPO for green hydrogen projects.

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Weekly Market Highlights & Insights:

1. Asia Index Introduces Three New Indices Asia Index, a subsidiary of BSE Ltd, launched three innovative indices aimed at providing investors with broader options for portfolio management and passive strategies like ETFs and index funds. These indices are expected to offer diverse investment strategies, benchmarking both mutual funds and portfolio management strategies.

• BSE Sensex Sixty 65:35: A hybrid index combining the BSE Sensex and BSE Sensex Next 30 in a 65:35 ratio.
• BSE Sensex Sixty: Constituted from the free-float market capitalization of BSE Sensex and BSE Next 30 components.
• BSE Power and Energy Index: Tracks companies in the energy and utility sectors listed on the BSE 500. These new indices will provide broader investment opportunities and facilitate enhanced benchmarking for market participants.

2. Market Turmoil: Worst Nifty Week Since June 2022 Investors witnessed a turbulent week as the Indian market saw a massive sell-off, wiping out ?17 lakh crore in investor wealth. The BSE Sensex dropped over 4,100 points across five trading sessions, while the total market capitalization of BSE-listed stocks plummeted by ?15.9 lakh crore, settling at ?461.26 lakh crore. Key reasons behind the sell-off:

• Foreign Institutional Investors (FIIs) pulled funds from India and redirected them to Chinese markets, seeking attractive opportunities.
• China's recent stimulus measures accelerated this trend.
• The geopolitical tension between Israel and Iran contributed to cautious investor sentiment in emerging markets, further exacerbating the outflow of funds from Indian markets.
• SEBI tightens F&0 rules, raising concerns amongst the stock market participants.

3. Discontinuation of Weekly Derivatives Contracts for SENSEX 50 and BANKEX The BSE announced the discontinuation of weekly derivatives contracts for SENSEX 50 (effective Nov 14, 2024) and BANKEX (effective Nov 18, 2024), following a SEBI circular. Existing contracts will be honored until their expiry, but no new weekly derivatives contracts will be launched after the mentioned dates.

4. SEBI Tightens Regulations for Futures and Options (F&O) In a move aimed at reducing excessive speculation and increasing market stability, SEBI introduced new regulations for the Futures and Options segment. These changes will be implemented in phases, starting on November 20, 2024. Key changes include:

• Upfront Premium Collection: Full options premium must be collected upfront from buyers, effective February 1, 2025.
• Removal of Calendar Spread Treatment: Calendar spread benefits eliminated on expiry days, starting February 1, 2025.
• Intraday Position Monitoring: Stock exchanges required to monitor position limits throughout the trading day, beginning April 1, 2025.
• Increased Contract Size: Minimum contract size for index derivatives raised to ?15 lakh, effective November 20, 2024.
• Limiting Weekly Expiries: Only one weekly index expiry allowed per exchange from November 20, 2024.
• Tail Risk Coverage: Additional 2% extreme loss margin on all short options contracts on expiry days to manage speculative risks.

Key Indices Performance:

• Nifty Auto: Registered its largest single-week decline in over two years. TVS Motors and Hero Motocorp were the major contributors to the fall.
• Nifty Energy: Snapped a three-week gaining streak as Adani Green and Reliance Industries dragged the index down.
• Nifty Bank: After three consecutive weeks of gains, the index declined. Axis Bank and IndusInd Bank led the losses.
• Nifty PSU Bank: Down by 2% this week, with Punjab Sind Bank and Indian Overseas Bank suffering the biggest losses.
• Nifty FMCG: Declined for the second consecutive week, mainly dragged down by Dabur.
• Nifty Pharma: Dropped by over 1.5% this week.
• Nifty Midcap: Ended its three-week gaining streak.
• Nifty Smallcap: Recorded its third consecutive weekly decline.
• Nifty Realty: Posted its biggest weekly drop in over six months, with Phoenix Mills and Macrotech Developers among the worst performers.
• Nifty Metal: Hit a record high this week, with National Aluminium and APL Apollo Tubes leading the gains.

Market Overview:

• The broader market saw a nearly 5% drop, snapping a three-week winning streak.
• BSE-listed companies erased market capitalization worth nearly ?18 lakh crore this week.
• 46 out of 50 Nifty stocks posted losses, with Reliance Industries, Shriram Finance, and Hero Motocorp among the top losers.
• Midcap stocks also suffered, with Edelweiss Financial, Godrej Industries, and Mahindra & Mahindra Financial recording notable losses.

Sectoral Summary:

• Nifty Realty emerged as the top sectoral loser, slipping by 8% as most stocks ended the week in red.
• All sectoral indices except Nifty Metal ended lower this week.

Top Gainers of the week :

BASF – ?8183 (+13.00%)

BASF led the charge among the top gainers, posting an impressive 13% increase. The stock saw substantial buying interest, driven by strong earnings and positive industry outlook.

BSE – ?4108 (+13.00%)

BSE also witnessed a robust rally, growing by 13% this week. The performance was supported by increased trading volumes and positive sentiment around exchange stocks.

Vijaya – ?989 (+12.00%)

Vijaya recorded a 12% jump, benefiting from solid quarterly earnings and optimistic future growth prospects.

JP Power – ?19.40 (+10.00%)

JP Power surged by 10%, largely attributed to increased investor interest in the power sector as reforms and policy changes continue to create favorable conditions.

Saregama – ?608 (+7.00%)

Saregama gained 7%, with continued strength in its content and streaming business helping the stock sustain its upward trajectory.

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Top Losers of the week:

SW Solar – ?547 (-16.00%)

SW Solar was the top loser this week, dropping by 16%. The decline was driven by concerns over future profitability amid rising costs in the renewable energy sector.

Nuvama – ?5895 (-14.00%)

Nuvama saw a sharp fall of 14%, impacted by weaker-than-expected quarterly results and regulatory challenges.

RITES – ?317 (-11.00%)

RITES shed 11% over the week, primarily due to a slowdown in contract awards and delays in key infrastructure projects.

Intellect – ?887 (-10.00%)

Intellect Design Arena struggled this week, losing 10% as investors reacted to concerns over slower growth in its financial technology solutions.

Phoenix ITXLTD – ?1672 (-10.00%)

Phoenix ITXLTD closed the week down 10%, facing challenges from weaker demand and increasing competition in the IT?services?space.

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Corporate Highlights:

1. Juniper Hotels: Board approves credit facilities via a ?280 cr term loan from ICICI Bank.

2. Cyient DLM: Share price recovers after announcing the acquisition of a US-based company.

3. Indoco Remedies: Receives final US FDA ANDA approval for cetirizine hydrochloride tablets.

4. Bajaj Finance: Customer franchise grows to 92.09 million.

5. GAIL: Signs MoU with AM Green to develop 2.5 GW of renewable energy & green chemical projects.

6. VIP Industries: Partners with Unicommerce for enhanced operations.

7. Wonderla Holidays: Approves to raise ?800 crore for business?expansion.

8. SEBI gives approval to Jio Financial and BlackRock to set up a mutual?fund?business.

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Global Market Overview: Mixed Performance Amid Economic Concerns

Global markets showed varied performance over the past week, with U.S. indices experiencing minor declines. The S&P 500, Dow Jones, and NASDAQ fell between 0.7% and 1.1%, driven by rising bond yields and the possibility of further interest rate hikes from the Federal Reserve.

In Europe, the FTSE dropped 0.7%, as inflation fears continued to dominate investor sentiment.

Asian markets saw mixed results. Japan's Nikkei 225 tumbled by 3%, amid concerns over the weakening yen and global economic uncertainties. The Kospi in South Korea also fell by 3.02%, reflecting disappointing export data.

On the other hand, China's markets surged, with the Shanghai Composite Index climbing 8.06% and Hong Kong’s Hang Seng Index jumping 10.20%. These gains were fueled by government stimulus measures, renewed optimism in the property sector, and easing regulatory pressures on tech firms, boosting confidence in China's economic recovery.

Next week, global markets will keep a close watch on economic data and central bank announcements.

FII DII Data:

Foreign Institutional Investors Withdraw ?40,511 Crore from Indian Markets in Recent Days

In a significant move impacting the Indian equity market, Foreign Institutional Investors (FIIs) have pulled out a staggering ?40,511 crore (approximately $5 billion) from the market in just a few days. Here’s a breakdown of the outflows:

• On September 30, FIIs withdrew ?9,791.93 crore.
• The selling continued on October 1, with an outflow of ?5,579.35 crore.
• The trend escalated on October 3, where the outflow reached ?15,243.27 crore.
• The latest figures from October 4 indicate an additional withdrawal of ?9,896.95 crore.

This sudden and massive withdrawal of funds has raised concerns among market analysts and investors, indicating potential shifts in market sentiment and investor confidence. The significant selling activity highlights the volatile nature of foreign investment in the Indian markets, which may affect liquidity and overall market performance in the coming days.

IPO Corner:

October started with a signal of IPO rain to continue in October as 17 mainboard IPO DRHP’s were filed in just one single day (30TH September). It was an all-time record of highest DRHP filings in a single day.? IPO Carnival is not stopping any soon but first have a look at the IPO report card of the IPO’s listed this week!

Report Card of recently listed IPO’s

KRN Heat Exchanger made a bumper debut in the markets whereas Manba Finance and Diffusion Engineers disappoint as the companies list below the market expectations.

Bulk deals in Diffusion Engineers IPO:

Trade Corner bought 3,69,065 shares at 193.50 per share

3P India Equity Fund 1 (Prashant Jain)? bought 11,00,793 shares at 202.76 per share

IPO opening for subscription coming week

Garuda Construction: Brief Note

Fresh Issue : 174 crores || OFS : 90 crores

Subscription Timeline: 8 Oct – 10 Oct

Allotment Date: 11 Oct

Listing Date: 15 Oct

Incorporated on September 21, 2010, Garuda Construction and Engineering limited, is a growing civil construction company which provides end-to-end civil construction for residential, commercial, residential cum commercial, infrastructure and industrial projects. the Company also provide services such as operations and maintenance services (“O&M”) and Mechanical, Electrical and Plumbing (“MEP”) services and finishing works as a part of their construction services.

As of September, 2024 the company’s order book stands at 1400 crores.

Objects of the Issue:

• Working Capital Requirement
• General Corporate Purposes including unidentified inorganic acquisitions

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Financial Overview & Key Performing Indicators

Key Positive

• Visible growth through increasing order book.
• Experienced Promoter, Directors & Management Team with the Chairperson and Managing Director who is also the Promoter, having over 2 decades of experience in various businesses, such as construction, hospitality and management services
• The company has established a track record of successfully executing a diverse mix of construction projects i.e., residential, hospitality, and commercial projects.
• The company’s goal is to use the project management and execution capabilities to accomplish our projects on schedule while keeping high construction quality.

Key Negative

• The Company’s total revenue comes from their top 10 clients, mainly their promoter related entities and group companies. The loss of any of their significant clients may have an adverse effect on their business.
• There are outstanding legal proceedings involving the Company, Promoter, certain Directors and Group Companies which may adversely affect their business, financial condition and results of operations.
• The construction industry is cyclical and sensitive to changes in the economy and this could have a significant impact on the Company’s operations and financial results.

It has been a tough week for the stock market participants because there has been a massive sell off across all the sectors. SEBI’s move of curbing movements for the F&O participants has not been so welcoming by the market. While some argue that these measures may dampen market dynamism and reduce participation, especially from retail traders, they are largely seen as a necessary step to curb excessive risk-taking. Markets need stability and transparency to ensure long-term growth, and SEBI's regulations aim to strike that balance by protecting investors while still allowing market innovation. In the short term, brokers and traders may feel the pinch, but in the long term, these steps could lead to a more robust and secure financial?ecosystem.