The retail frenzy over initial public offers (IPOs) seen over the past few months is not without reason. Over the past two years, 61 companies have tapped the primary market and raised funds via IPOs. Of these, 24 companies (nearly 39 per cent companies) have more than doubled at the bourses with Happiest Minds, IndiaMart Intermesh, Indian Railway Catering and Tourism Corporation (IRCTC), Affle India and Route Mobile surging 468 per cent to 722 per cent since their listing date till now. Retail participation in the equity market, according to analysts, has just reached an inflection point due to the low interest rate regime amid lack of investment-worthy avenues that can generate a good return for investors.
'Waiting for a market correction and optimising entry time in the markets will be akin to missing the woods for the trees.'
'Over the next two quarters, markets will be guided by observing the earnings resilience of corporates during the second lockdown, progress of the monsoon and the damage, if any, to rural spending power due to the second wave.'
'It is less dependent on imported capital.'
Zomato's initial public offer (IPO) is scheduled to open for subscription on July 14 and is priced between Rs 72 - 74 per share. At the upper end of the price band of the offering, the company aims to raise Rs 9,350 crore. Most analysts have given a 'subscribe' rating to the issue for listing gains.
Mid- and small-cap indices have outperformed the frontline benchmarks - the S&P BSE Sensex (up around 10 per cent) and the Nifty50 (13 per cent) - in the first half of calendar year 2021 (H1-CY21) by rallying 26 per cent and 39 per cent, respectively. The trend, analysts believe, is likely to continue in H2-CY21 as well. The outperformance in H1-CY21 comes on the back of improved earnings and strong inflows from the foreign portfolio investors (FPIs) in Indian equities. However, good monsoon so far, gradual opening up of the economy and the pick-up in the pace of vaccination provides support to the market.
Covid-19 pandemic that brought life to a near standstill in 2020 has left Indian adults poorer by 6.1 per cent in 2020, suggests the Credit Suisse Global Wealth Report 2021. Wealth per Indian adult in 2020, according to the report, dropped to $14,252 by 2020-end compared to pre-pandemic levels. On a cumulative basis, Credit Suisse estimates the drop in the wealth of Indian adults at $594 billion.
Shares of Adani Group companies were in focus during Monday's session, with four of the six listed stocks being locked in the upper circuit of 5 per cent, bouncing back up to 11 per cent from their respective intra-day lows on the BSE. Adani Green Energy (Rs 1,115.85), Adani Transmission (Rs 1,297.65), Adani Total Gas (Rs 1,321) and Adani Power (Rs 120.60) were locked in 5 per cent upper circuit on the BSE. Adani Ports and Special Economic Zone (APSEZ) and Adani Enterprises rallied over 7 per cent and 6 per cent, respectively, in intra-day trade. In comparison, the Sensex rose 0.44 per cent to 52,574.46 on Monday. Last week, all Adani group stocks had come under pressure after a media report suggested that the National Securities Depository (NSDL) had frozen accounts of three foreign funds that own stake in four of Adani Group companies.
Foreign brokerage firm CLSA initiated coverage on the stock with a Sell rating and target price of Rs 1,095, citing hefty premium valuation.
72 per cent of the revenue of Indian firms (India Inc) is derived from the domestic / home market - the sixth highest in percentage terms in the emerging market (EM) and the Asian region, said a recent report by Morgan Stanley. The balance, according to the report titled 'Global Exposure Guide 2021' co-authored by analysts led by Jonathan F Garner, their chief Asia and emerging market strategist, is split between the developed markets (DMs) and other EMs. The report is based on an analysis of 3,300 companies globally that have revenue exposure in 17 different regions.
'For equities, inflation trending upwards but within the range of expectations can actually be a big positive as it helps earnings and may shift flows from bonds to equities.'
Despite near-term headwinds of rising input costs and the possibility of lower demand for products as Covid dented rural & urban India, and impacts both production & consumption, analysts remain bullish on stocks of fast moving consumer goods (FMCG) companies and expect the index to relatively outperform its peers in the second half of fiscal 2021-22 (FY22). In the past one year, prices of key commodities such as groundnut oil, mustard oil, Vanaspati, soya oil, sunflower oil and palm oil have shot up in the range of 20 per cent to 60 per cent, data show. The FMCG sector macros in this backdrop, according to analysts, have further deteriorated because of weakness in consumer demand and likely margin pressure due to elevated crude oil, palm oil and global food prices.
'Allocate some parts of one's surplus income towards cryptocurrencies, considering the immense growth potential of this emerging asset class.'
Around 75 per cent, or 372 stocks, that are part of the BSE500 are trading at least 10 per cent below their all-time high levels, despite the index hitting a record high 20,515 points on the BSE in intra-day trade on Wednesday, surpassing its previous high of 20,390 touched in March 12. The index, which accounts for 93 per cent of BSE listed companies' market capitalisation, has gained 8 per cent from its recent low of 18,983, touched on April 19. In comparison, the benchmark S&P BSE Sensex gained 6 per cent over the same period, but is still nearly 4.5 per cent away from its all-time high of 52,517 that it hit on February 16.
'There is a weak link between the economy and the stock market.'
'If one believes that the Indian stock market will go up 70 per cent every year for the next 10 years, I wish you good luck!'
In a bull-case scenario it sees the Sensex at 61,000 levels, while it's bear case scenario pegs the Sensex at 41,000 levels by December 2021.
Markets
'In the short term, we may see some disruptions due to Covid, but in the medium-to-long term, we should keep an eye on US inflation and 10-year bond yields.'
Agriculture activity, according to recent channel checks by Prabhudas Lilladher, is expected to continue at a strong pace in FY22.
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