4 Factors Why Stock Markets Surged, Ixigo's IPO, and Buzzing Stocks Today

Mon, 16 Aug Pre-Open

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Indian share markets ended on a strong note on Friday.

Benchmark indices hit fresh record high on Friday, riding on some positive domestic and global cues as investors remain optimistic about the present growth momentum.

At the closing bell on Friday, the BSE Sensex stood higher by 593 points (up 1.1%).

Meanwhile, the NSE Nifty closed higher by 165 points (up 1%).

Tata Consumer Products and TCS were among the top gainers.

Eicher Motors and Dr Reddy's Laboratories, on the other hand, were among the top losers.

Both, the BSE Mid Cap index and the BSE Small Cap index ended the day on a flat note.

On the sectoral front, gains were largely seen in the telecom sector, IT sector, and engineering sector.

Healthcare and realty stocks, on the other hand, witnessed selling pressure.

Shares of Siemens and Cummins India hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading up by 0.4% at Rs 46,527 per 10 grams at the time of closing stock market hours on Friday.

Here are Top 4 Factors Why Indian Share Markets Rallied

Strong Corporate Results in June Quarter: One of the biggest factors driving the stock market is a strong performance by Indian corporates across sectors in the first quarter of the fiscal 2022.

Many companies, especially IT and steel firms, have performed better than expectations in the first quarter of the financial year, providing a big boost to bullish market sentiments.

Inflation Cools Off: The decline in consumer price index (CPI) inflation to 5.59% in July from 6.3% in June will give comfort to the Reserve Bank of India (RBI) to continue with its loose monetary policy and accommodative monetary stance.

Jobless Claims Fall: Americans filing claims for unemployment benefits fell again last week as the economic recovery continued to be bumpy, a separate Labor Department report showed last week.

IPO Rush: The rush in initial public offerings (IPO) has also kept market sentiments high in 2021 as it has led to more investors entering the stock market.

As more companies go public, many people are investing in them in order to gain from the current momentum in the stock market.

The IPO rush is likely to add more investors in stock markets this year and ultimately lead to higher optimism.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

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Top Stocks in Focus Today

Among the buzzing stocks today will be Vodafone Idea.

Vodafone Idea (Vi) has said it is a "travesty of justice" and "inconceivable" that the Supreme Court (SC) has not allowed errors in adjusted gross revenue (AGR) calculations to be corrected, a ruling which will cost the cash-strapped telco around Rs 250 bn and force it to shut down.

In its petition filed last week to review the 23 July order of the court not allowing correction of alleged errors in the telecom department's AGR calculations, Vodafone Idea said it had no intentions to wriggle out from paying its AGR dues as mandated by the court.

But if arithmetical mistakes are not allowed to be corrected, then it will have to shut shop, leaving nearly 280 m subscribers, some 20,000 direct and indirect employees, banks and retailers high and dry, with even the government getting affected.

Vodafone's review petition was filed within weeks of SC rejecting its earlier appeal to look into alleged arithmetical errors made by the DoT, thus confirming the AGR dues at Rs 582.5 bn, of which it has paid Rs 78.5 bn.

The company had said there was double counting by the telecom department and some of the payments made were not included.

Vodafone's own calculations put the AGR dues at Rs 215.3 bn, which was disallowed by the top court.

Tata Power share price will also be in focus today.

Tata Power Solar Systems has been awarded a project to build a solar photovoltaic (PV) plant with 50 megawatt hour (MWh) battery energy storage system (BESS) in Leh, Ladakh.

The 50MW solar PV plant will be built on EPC (engineering, procurement and construction) mode.

According to a statement by Tata Power, the order value of the project is Rs 3.9 bn. The commercial operation is expected to start from March 2023.

This will be India's first co-located large scale BESS solution as well as first large-scale solar PV project in the Union Territory of Ladakh to be set up at a high altitude of 3,600 meters above sea level, it stated.

With the addition of this project, the order pipeline of Tata Power Solar now stands at 4 gigawatts (GW) with order value of Rs 124.1 bn.

The scope of work includes design, engineering, supply & procurement, construction of solar photovoltaic grid connected power plant project and BESS on a turnkey basis along with ten years of operations and maintenance services.

Praveer Sinha, CEO & MD of Tata Power, said,

• This project is a testament of contribution towards developing an advanced ecosystem for faster adoption of clean energy across the nation.

Tata Power Solar is a wholly-owned subsidiary of Tata Power.

Indian FMCG Industry Clocks 37% Value-Based Growth in April - June Quarter

The Indian FMCG industry recorded a 36.9% value-based growth in April-June 2021, the quarter hit by the second wave of the pandemic, over the corresponding period a year ago.

If compared with this year's January-March quarter performance, the industry saw a 2% drop, a report by analytics firm Nielsen has noted.

Ecommerce grew in the double-digit in the April-June quarter and traditional trade channels like grocers and chemists remained buoyant in the quarter.

Indian FMCG companies were largely immune to the second wave of the Covid pandemic.

In the comparative April-June quarter last year, the market faced a nationwide lockdown imposed by the government to tackle the spread of Covid-19 and then subsequent easing of restrictions happened in phases.

During the quarter, as the supply chain was facing constraints, retailers continue to respond with evolved and optimised stocking behaviour.

Two trends were observed in terms of the retail stocking - expansion of assortment width and assortment depth (number of variants and associated quantities in stock) is being optimized.

This signifies that retail shelf space is getting more competitive and the call for action for manufacturers is to identify the right variants, by markets, and finding optimum frequency for servicing retail outlets.

The growth momentum did not see any major setback with the sudden onset of second wave. When indexed to pre-covid times, the industry largely continued to remain at similar levels, the report added.

Ixigo IPO: Travel Aggregator Files for Rs 16 bn Public Issue

AI-based travel app ixigo, which is backed by the likes of Sequoia Capital, Elevation Capital (formerly Saif Partners), GIC and Micromax, has filed its papers with market regulator to raise Rs 16 bn via an IPO.

According to the draft red herring prospectus (DRHP), the IPO will have a primary component of Rs 7.5 bn and an offer for sale (OFS) component of Rs 8.5 bn.

The issue will facilitate a partial exit for investors Elevation Capital and Micromax, and the proceeds will also be used for organic and inorganic growth initiatives and general corporate purposes.

ICICI Securities, Axis Capital, Kotak Mahindra Capital and Nomura are the investment bankers working on the IPO.

Law firms Shardul Amarchand Mangaldas and Khaitan & Co are the legal advisors.

Ixigo was launched in 2007 by Aloke Bajpai and Rajnish Kumar and competes with the likes of listed peers Easemytrip, Yatra and Booking.com.

It helps customers to organise, book and track trips and provides real-time prices and availability for flights, trains, buses, cabs, hotels and destinations.

How the IPO sails through remains to be seen. Meanwhile, stay tuned for more updates from this space.

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

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