Sensex Opens 200 Points Higher; Capital Goods & Realty Stocks Lead

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Asian share markets are lower today as Chinese and Hong Kong shares fall. The Nikkei 225 is down 1.4% while the Hang Seng is down 1.3%. The Shanghai Composite is trading lower by 2.4%.

Wall Street indices slumped on Monday after a fall in China's yuan currency and US President Donald Trump's vow to impose additional tariffs on Chinese goods sparked an escalation of the US-China trade war.

Back home, India share markets have opened the day on a strong note. The BSE Sensex is trading up by 210 points while the NSE Nifty is trading up by 58 points. The BSE Mid Cap index and the BSE Small Cap index have opened the day up by 0.6%.

Barring IT sector, all sectoral indices have opened the day on a positive note with stocks in the realty sector, auto sector, and capital goods sector witnessing maximum buying interest.

The rupee is trading at Rs 70.66 against the US$.

In news from the banking sector, global private equity major Warburg Pincus has pledged its entire 9.86% shareholding in private lender IDFC First Bank to raise funds.

Warburg holds 471.7 million shares in IDFC First Bank through an entity called Cloverdell Investment. Reportedly, Warburg pledged the shares with Citigroup, Barclays and Standard Chartered to raise funds.

In 2012, Warburg had acquired a 42.7% stake in Capital First, formerly Future Capital Holdings, from Pantaloons Fashion and Retail. Subsequently, in October that year, it had bought an additional 24.4% stake through an open offer.

In December 2018, IDFC Bank and Capital First merged to form a combined entity with assets of Rs 880 billion under management and a distribution network of 194 branches.

Note that, India has been a major investment destination for Warburg. Warburg's other recent investments in India include leading a US$ 65 million round in logistics startup Rivigo, a US$ 200 million commitment to set up a shopping mall platform with realtor Runwal Group and a plan to jointly invest Rs 30 billion with Lemon Tree Hotels to develop student housing and co-living spaces.

IDFC First Bank share price has opened the day up by 1.4%.

Moving on, in latest developments from the IPO space, the initial public offering (IPO) of microfinance lender Spandana Sphoorty Financial opened for subscription on Monday and was subscribed 6% on the first day of bidding. The portion reserved for qualified institutional buyers was subscribed 19%.

The company plans to raise around Rs 12 billion through the public issue, which consists of a fresh issue of Rs 4 billion and offer for sale of Rs 8 billion by promoters and investors.

The net proceeds from the fresh issue are proposed to be utilised towards augmenting its capital base to meet future capital requirements and general corporate purposes.

Ankit Shah, in his premium newsletter Insider, has shared the detailed note of the IPO. You can read it here.

Meanwhile, Shapoorji Pallonji-led Sterling and Wilson Solar's (SWSL) Rs 31.3 billion IPO will hit the markets today. The IPO comprises entirely of an offer for sale of 40.3 million shares. The issue is priced at Rs 775-780 per share.

SWSL is an end-to-end solar EPC solutions provider and was the world's largest solar EPC solutions provider in 2018 based on annual installations of utility-scale Photo-voltaic (PV) systems of more than 5 megawatt (MW).

The company provides EPC services primarily for utility-scale solar power projects with a focus on project design and engineering. It also provides operations and maintenance (O&M) services.

The company operates in around 26 countries and is the largest solar EPC solutions provider in each of India, Africa and the Middle East.

As of March 31, the company's order book stood at Rs 77.4 billion, which includes letters of intent worth Rs. 39.1 billion for solar power projects for which it has won the bid but has not yet executed definitive.

Speaking of IPOs, the first half of 2019 hasn't seen a lot of activity in the IPO market.

There have been just 8 IPO on the main board, raising as much as Rs 55.1 billion, compared with 24 that raised Rs 309.6 billion in the year earlier period.

Despite lackluster activity in India's primary markets, there have been attractive money-making opportunities for attentive investors.

Ankit Shah recommended applying to the IPO of Polycab India and the more recent IPO of IndiaMART InterMESH.

Both IPOs were subscribed many times over. And both gave handsome double-digit returns on the listing date.

Top 3 IPO Gains in 2019

At Equitymaster, we believe a merit-based selection, primarily including valuation, business, and management quality, is the logical way to go about investing in IPOs.

If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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