4 Factors Why Markets Plunged, November IPO Frenzy, and Buzzing Stocks Today

Fri, 29 Oct Pre-Open

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Indian share markets ended deep in the red yesterday.

Benchmark indices broke psychological levels in trade amid broad-based sell-off as banking, metal and realty shares slumped.

The Sensex cracked below the 60,000-mark and fell sharply to a low of 59,778, while the Nifty nose-dived below the 18,000 mark to a low of 17,799.

At the closing bell yesterday, the BSE Sensex stood lower by 1,159 points (down 1.9%).

Meanwhile, the NSE Nifty plunged 354 points (down 1.9%).

IndusInd Bank and L&T were among the top gainers.

Adani Ports and ITC, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended down by 1.4% and 1.6%, respectively.

Sectoral indices ended on a negative note with stocks in the realty sector, banking sector and power sector witnessing selling pressure.

Shares of IndusInd Bank and Grindwell Norton hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading down by 0.1% at Rs 47,927 per 10 grams at the time of closing stock market hours yesterday.

Here are 4 Factors Why Indian Stock Markets Crashed

Weak Global Cues: Asian stock markets witnessed selling pressure yesterday.

The Hang Seng and the Shanghai Composite ended down by 0.3% and 1.2%, respectively. The Nikkei ended down by 1%.

FII Outflows: Relentless selling by foreign institutional investor (FIIs) is one of the key reasons for this correction in the market.

According to NSE data, FIIs sold Rs 1.9 bn worth of shares on Wednesday.

Inflationary concerns: Inflation and a slowdown in global growth momentum are other concerns amid expensive valuations.

India's central bank may have brought down inflation worries, but price pressures could potentially re-emerge soon.

On 8 October 2021, the Reserve Bank of India lowered the inflation forecast to 5.3% for the ongoing financial year from its earlier estimate of 5.7%.

However, while the central bank has projected inflation at 5.2% in the next financial year, its estimates show that consumer prices may heat up by the March quarter.

Profit booking: Apart from the above, losses were also seen as share market succumbed to profit-booking.

Most of the profit-booking was seen in the realty and banking sector with stocks such as ICICI Bank and Adani Ports dragging the benchmark index lower.

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!

Speaking of stock markets, Brijesh Bhatia shares his short-term view on the Nifty, in his latest video for Fast Profits Daily.

Brijesh believes, despite the recent bearishness in the market, the Nifty is still in a bullish trend. In other words, the bulls are still in control of the Nifty.

Tune in to the video below to find out more:

Top Stocks in Focus Today

Among the buzzing stocks today will be Bajaj Finserv.

Bajaj Finserv reported 13.8% rise in consolidated net profit to Rs 11.2 bn on a 19.6% increase in total income to Rs 180 bn in September quarter of 2022 compared to the last year.

Profit before tax in quarter two stood at Rs 27.9 bn, up by 29.5% from Rs 21.6 bn in the same period last year.

Bajaj Finserv said after the disruption caused by the second wave of the pandemic, recovery in the business gathered momentum on the back of reopening of the economy in most states, rapid vaccinations and policy support.

The non-bank lender said the business has now shifted focus to growth and remains 'cautiously optimistic' about its prospects for the remainder of the current financial year.

The company's subsidiary Bajaj Allianz General Insurance reported a 28% year on year (YoY) rise in net profit to Rs 4.3 bn in the reported quarter. The business' gross written premium jumped 21% YoY to Rs 50.3 bn in the quarter.

Bajaj Allianz Life Insurance also reported a solid quarter of earnings as new business premium rose 62% YoY to Rs 22.3 bn in the quarter. Renewal premium in the quarter was up 22% whereas, gross written premium climbed 42%.

Adani Ports share price will also be in focus today.

Shares of Adani Ports & Special Economic Zone (APSEZ) dropped the most in at least 19 weeks after the company's net income and sales missed analysts' estimates in the quarter ended September.

India's largest private port operator's profit fell 27% sequentially to Rs 9.5 bn in the July-September period.

Its cargo volumes also declined 9.7% over the preceding three months.

In a separate filing on Wednesday, Adani Ports said it has decided to exit its investment in Myanmar by June next year.

The board has decided to actively work on a plan on exiting company's investment in Myanmar including divestment opportunities (expected to be concluded by March - June 2022).

In August this year, the company had said its investment in a port in Myanmar was not in violation of any sanction guidelines issued by the office of foreign assets control (OFAC) of the US Department of Treasury.

The project had run into controversy after it was reported that APSEZ chief executive Karan Adani had in July 2019 met Senior General Min Aung Hlaing, the army chief who led a coup against the elected government.

Nykaa IPO Sails through on Day 1, Retail Portion Oversubscribed

The public issue of Nykaa owner FSN E-Commerce Ventures has been subscribed 155% so far on 28 October 2021, the first day of bidding. The offer has received bids for 40.9 m equity shares against the IPO size of 26.4 m equity shares.

Nykaa IPO opened for subscription on 28 October at the price band of Rs 1,085-1,125 per share. It will conclude for bidding on 1 November 2021. The company raised close to Rs 24 bn from anchor investors ahead of the bidding process.

Retail investors subscribed to over 350% of their reserved portion. Whereas the non-institutional subscribers put in bids 60% of their reserved portion.

In other news, the initial public offerings (IPOs) season is back with a bang as three companies are set to open their bidding process for public listing.

PolicyBazaar, Sigachi Industries and SJS Enterprises are looking to altogether raise Rs 66.3 bn in the first week of November. All three IPOs will open on 1 November and close on 3 November.

Meanwhile, investors are awaiting announcement on IPO dates of fintech players Paytm, MobiKwik and edible oil maker Adani Wilmar, which may also open in November.

PB Fintech, the parent company of online fintech marketplaces PolicyBazaar and PaisaBazaar, is coming with an IPO next week. The issue size of the IPO is Rs 57.1 bn.

While the Hyderabad-based manufacturer of cellulose-based excipients, Sigachi Industries, is looking to raise Rs 1.3 bn by selling 7.7 m shares. The company is engaged in the manufacturing of microcrystalline cellulose, the polymer that is widely used for finished dosages in the pharmaceutical industry.

SJS Enterprises, one of the leading players in the Indian decorative aesthetics products industry, will also open its IPO alongside PolicyBazaar and Sigachi Industries on 1 November 2021. The IPO consists of a pure offer for sale (OFS) of Rs 7.1 bn by Evergraph Holdings and Rs 900 m by KA Joseph.

How all the three IPOs 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.

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

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