RBI Monetary Policy Highlights, Air India Privatization, and Buzzing Stocks Today

Mon, 11 Oct Pre-Open

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Indian share markets ended on a positive note on Friday

Benchmark indices extended gains to a second straight day after the RBI decided to keep the key rates unchanged and remain 'accommodative' after a scheduled review.

The market cheered the announcements with the easing of concerns about an earlier-than-expected tightening of monetary policy.

At the closing bell on Friday, the BSE Sensex stood higher by 381 points (up 0.6%).

Meanwhile, the NSE Nifty closed higher by 105 points (up 0.6%).

Reliance Industries and Wipro were among the top gainers.

SBI Life Insurance and Coal India, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 0.2% and 0.8%, respectively.

Sectoral indices ended on a mixed note with stocks in the energy sector and IT sector witnessing most of the buying interest.

Realty stocks, on the other hand, witnessed selling pressure.

Shares of Persistent Systems and TVS Srichakra hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading up by 0.2% at Rs 46,927 per 10 grams at the time of closing stock market hours on Friday.

Speaking of precious metals, India's #1 trader Vijay Bhambwani discusses whether you should buy silver ETFs, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

Top Stocks in Focus Today

Among the buzzing stocks today will be BPCL.

The market regulator is unlikely to give exemption to the company acquiring BPCL from making mandatory open offers for Petronet LNG and Indraprastha Gas share purchases which will be countered by other promoters of the two firms such as GAIL to save from going private.

BPCL holds 12.5% of the shareholding in Petronet LNG and a 22.5% stake in Indraprastha Gas (IGL). It is a promoter of both the listed companies and holds board positions.

As per the legal position evaluated by the Department of Investment and Public Asset Management (DIPAM), the acquirer of BPCL will have to make open offers to the minority shareholders of Petronet and IGL for the acquisition of 26% shares.

To avoid this, a request was laid in front of markets regulator which officials are saying is unlikely.

If the open offers are successful, the acquirer of BPCL would also become the largest shareholder in Petronet (12.5% of BPCL plus 26% from the public) and get a controlling holding in IGL (22.5% of BPCL and 26% from public).

The government's 52.98% stake in BPCL is valued at about Rs 518 bn at the current share price.

Vedanta and private equity firms Apollo Global and I Squared Capital's arm Think Gas are in the race to buy the government's stake in BPCL.

JSW Energy share price will also be in focus today.

Shares of JSW Energy were in focus after the company said it has signed a contract with GE Renewable Energy, a leading provider of wind solutions.

The contract is for the supply of 810 MW (megawatt) of onshore wind turbines for its under-construction pipeline of 2.5 GW (Gigawatt) of renewable projects.

The turbines will produce enough green energy to meet the annual electricity requirements of more than 2.1 m households in the country.

Prashant Jain, joint managing director and chief executive officer (CEO), JSW Energy said,

• Our company has set a target to reach 20 GW of power generation capacity by 2030, by which the share of green and renewable energy projects will increase to 85% of the total portfolio.
  
  The under-construction project is our first large-scale wind power project.

The supply of the turbines will start by the second quarter of 2022 and will be completed by the first quarter of 2023.

Blades will be provided by LM Wind Power, a GE Renewable Energy business, from its Indian factory in Halol, Gujarat.

JSW Energy is currently implementing about 2 GW of wind farms in India.

RBI Keeps Repo Rate Unchanged, Maintains Accommodative Stance

In its latest meeting, the Reserve Bank of India's Monetary Policy Committee (MPC) has decided to maintain the status quo and keep the repo rate unchanged at 4%. The reverse repo rate will continue to be 3.35%.

Governor Shaktikanta Das said the policy stance continues to be "accommodative". This is the eighth consecutive time the MPC maintained a status quo in rates.

The MPC statement comes amid easing inflation and recovery in economic growth. The decision to keep the repo rate unchanged is in line with what experts had predicted.

However, the MPC revised its projection for CPI inflation for the September 2021 quarter to 5.1% from the previous forecast of 5.9%. The estimate for the December 2021 quarter has been revised to 4.5% from 5.3%.

The RBI has retained real gross domestic product (GDP) growth projection at 9.5% in 2021- 22 consisting of 7.9% in quarter two, 6.8% in quarter three; and 6.1% in quarter four of 2021-22.

Real GDP growth for the first quarter of 2022-23 is projected at 17.2%.

The central bank also decided to halt the Government Securities Acquisition Programme (G-SAP).

While unveiling the bi-monthly monetary policy review on 8 October, RBI Governor Shaktikanta Das said the liquidity overhang and absence of fresh government borrowing suggest that bond purchases are not required at the moment.

Das said G-SAP has been successful and anchoring yield expectations, coupled with other liquidity measures.

Tata Sons to Acquire Air India for Rs 180 Bn

Tata group has won the bid to acquire national carrier Air India. The salt-to-software conglomerate placed a winning bid of Rs 180 bn re-acquire the airline more than half a century after it ceded control to the government.

Apart from 100% stake in Air India and its low-cost arm, Air India Express, the winning bid also includes a 50% stake in ground-handling company Air India SATS Airport Services Private Limited (AISATS).

Earlier this month both Tata Sons and SpiceJet chairman Ajay Singh (in his private capacity) had placed bids. Reports last month that Tata had won the bid were played down by Union Minister Piyush Goyal, who said then that nothing had been finalised.

In December 2020, the government invited expressions of interest for the divestment of Air India.

Four bidders entered the race, with the Tatas and Ajay Singh the only ones to make it to the final stages.

We will keep you posted on more updates from this space. Stay tuned.

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

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