Hindalco's Strong Q3 Show, LIC IPO Update, and Buzzing Stocks Today

Fri, 11 Feb Pre-Open

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Indian share markets ended on a strong note yesterday.

Benchmark indices maintained its upward momentum aided by strong global cues and positive RBI policy.

The Reserve Bank of India's (RBI) first monetary policy for the calendar year 2022 kept key policy rates unchanged and continued with its accommodative stance to support growth.

This was the tenth straight policy when the repo rate was left unchanged at 4% and the reverse repo rate at 3.35%.

At the closing bell yesterday, the BSE Sensex stood higher by 460 points (up 0.8%).

Meanwhile, the NSE Nifty closed higher by 142 points (up 0.8%).

Tata Steel and ONGC were among the top gainers.

Maruti Suzuki and IOC, on the other hand, were among the top losers.

The SGX Nifty was trading at 17,604, up by 120 points, at the time of writing.

The BSE Mid Cap index and the BSE Small Cap index ended up by 0.3% and 0.1%, respectively.

Sectoral indices ended on a positive note with stocks in the metal sector, banking sector and power sector witnessing buying interest.

Shares of GMDC and Gujarat Narmada hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading up by 0.1% at Rs 48,684 per 10 grams at the time of closing stock market hours yesterday.

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The sentiment has shifted from greed to fear and this has implications for traders and investors.

In the video below, Brijesh discusses this change in sentiment and shares his view on it.

Top Stocks in Focus Today

Among the buzzing stocks today will be Hindalco.

Hindalco's consolidated net profit for the December quarter surged to an all-time high of Rs 36.8 bn, rising 96% year on year (YoY), driven by a consistent performance by Novelis and an exceptional performance by India Business, equally supported by favorable macros, strategic product mix and an improved performance by the downstream business.

The same was Rs 18.8 bn in the same quarter of last year.

Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) during the quarter stood at Rs 76.2 bn, rising 38% YoY.

The company has also clocked a record high quarterly Aluminium India EBITDA at Rs 33.8 bn, up 131% YoY, with margins of 41%.

Revenue from operations soared 44% to Rs 502.7 bn during the third quarter against Rs 349.6 bn in the same quarter last year.

Novelis continued to report consistent quarterly EBITDA despite challenges in the automotive segment due to the global semiconductor chip shortage, unplanned production downtime in South America and supply chain bottlenecks in Asia.

'Our sustained performance and strong balance sheet are driving our plans for further organic capex. We have already announced over Rs 30 bn investments in our downstream pipeline - Hirakud and Silvassa, and the acquisitions of Ryker and Hydro's Kuppam units. Novelis too has announced capital projects that align market growth with sustainability considerations. An example is the US$365 mn closed-loop recycling and casting centre for the North American market,' Hindalco MD Satish Pai said.

Persistent Systems share price will also be in focus today.

Continuing with its acquisition spree, Pune-headquartered Persistent Systems announced the acquisition of Princeton, New Jersey-based Data Glove for a consideration of US$90.5 mn (around Rs 6.8 bn).

Established in 2010, Data Glove is a leading player in transformative consulting services and business solutions with total annual revenue for the calendar year 2021 of US$49 mn and over 700 employees worldwide. Data Glove brings extensive experience across Microsoft Azure, business applications and workplace offerings as a One Commercial Partner (OCP).

In terms of financial details of the deal, Persistent will make an upfront payment of US$50.7 mn to Data Glove and founders of the company will be eligible for a maximum earnout of US$34.9 mn over the next two years. This amount is contingent on achievement of certain performance thresholds, said the company filing.

Sandeep Kalra, CEO and executive director, Persistent Systems, said,

• With the acquisition of Data Glove, we are forming a new Microsoft business unit to enhance our partnership and expand our expertise in Azure-based digital transformation, enabling us to capture a larger share of this high growth market.
  
  This acquisition also broadens our delivery capabilities with highly skilled talent, establishing a new nearshore delivery center in Costa Rica and expanding our presence in the US and India.

Government Weighs 5% Stake Sale in LIC IPO, No Fresh Stock to be Issued

India is considering selling about 5% of the shares it holds in a state insurer as it prepares to file documents for the country's biggest initial public offering (IPO).

The government plans to offer 316 million shares of the 6.32 bn shares it owns in Life Insurance Corporation of India (LIC), and no fresh stock will be issued. The draft prospectus is expected to be filed this week.

Deliberations are still ongoing and details could change, says a report. The embedded value of the company is estimated to be about Rs 5.4 tn (US$72 bn).

The first-time share sale by the insurer is part of Prime Minister Narendra Modi's efforts to mop up cash and help rein in a budget deficit that's widened in the midst of the pandemic. For almost two years, his administration has been preparing the IPO plan for LIC, which has almost US$500 bn in assets.

A sharp reduction in the government's asset-sale target for the financial year ending 31 March 2022 has sparked speculation that the state will be seeking less from the LIC IPO that was anticipated earlier. It had planned to raise about US$5 bn to US$13 bn

Reliance Industries to Acquire Stake in EV Technology Firm Altigreen

Reliance Industries announced the acquisition of a stake in electric vehicle (EV) technology and solutions company Altigreen Propulsion Labs for Rs 501.6 m.

'Reliance New Energy (RNEL), a wholly-owned subsidiary of the company, has entered into an agreement with Altigreen for the subscription of 34,000 Series-A Compulsorily Convertible Preference Shares of face value Rs 100 each for an aggregate consideration of Rs 501.6 m,' Reliance said in a stock exchange filing.

The company did not say how much equity shareholding will it get against the investment.

The transaction is proposed to be completed before March 2022.

Based out of Bengaluru, Altigreen is an electric vehicle technology and solutions company for commercial last-mile transportation through 2/3/4 wheeled vehicles.

It has developed an electric 3-wheeler vehicle, and its vehicles are built in-house in Bangalore on a mobility platform that is 100% indigenous.

Its current patent portfolio spans 60 countries with 26 global patents, the firm said, adding some of Altigreen's current technologies include electric motors and generators, vehicle controls, motor controls, EV transmissions, telematics & IoT and battery management.

'The investment is part of our company's strategic intent of collaborating with innovative companies in new energy and new mobility ecosystems,' it said.

Altigreen is a private limited company incorporated in India on 8 February 2013. It had a turnover of Rs 10.4 m in 2020-21.

The transaction will not require any government or regulatory approval, the firm added.

We will keep you updated on the latest developments from this space. Stay tuned.

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