After a sharp fall in the share prices of HDFC Bank and other private sector lenders in the past three days, the BFSI (banking, financial services and insurance) sector weighting in the Nifty50 has slipped to a seven-year low of 32.03 per cent, down from nearly 36.6 per cent at the end of March 2023 and 34.5 per cent at the end of December 2023.
India's first $1 trillion company by market capitalisation (mcap) is achievable by 2032 and HDFC Bank and Reliance Industries (RIL) are seen as lead contenders, ICICI Securities said in a note on Monday. To achieve this, the shares of both the firms will have to appreciate at least 20 per cent annually for the next decade. ICICI Securities believes this is possible if India's gross domestic product (GDP) growth accelerates to 9 per cent per annum and corporate profitability cycle peaks. "Our calculations suggest that India's first $1 trillion mcap stock could emerge by 2032.
The Nifty IT index rose by 5.14 per cent on Friday (January 12), marking its best performance in a day since July 2020, followed by another 1.9 per cent rally on Monday. With this, the index, which tracks the share prices of India's 10 biggest information technology (IT) services companies, has increased 7.1 per cent in the past two sessions. However, the substantial rally in the index occurred at a time when India's four largest IT companies reported their worst quarterly performance in over five years.
After the latest rout, the American depositary receipt (ADR) premium of HDFC Bank to its local shares has shrunk to nearly zero. Shares of HDFC Bank on Thursday fell 3.1 per cent to Rs 1,490, extending its two-day decline to 11 per cent. Meanwhile, the ADR has slumped over 15 per cent in the past two trading sessions.
Tata Group remained India's largest business conglomerate in market capitalisation in calendar year 2023 while the Mukesh Ambani camp raced ahead of the Adani businesses to become the second-largest. The Tata companies ended 2023 with a combined group market capitalisation of Rs 28.68 trillion, up 35 per cent from the Rs 21.2 trillion at the end of December 2022. Ambani's group mcap is Rs 19.42 trillion at the end of CY23, up 10.7 per cent from the Rs 17.6 trillion a year ago.
As much as Rs 47,810 crore was spent on share buybacks by 48 companies in 2023 -- the highest amount since 2017. This surge in value was largely driven by a few large-sized issues, including those by Tata Consultancy Services (Rs 17,000 crore), Larsen & Toubro (Rs 10,000 crore), and Wipro (Rs 12,000 crore). In 2022, 58 companies had repurchased shares worth Rs 38,305 crore, according to data from Prime Database.
The combined market capitalisation of Adani group companies increased to Rs 15.11 trillion last week. As a result, Gautam Adani's family raced ahead of Mukesh Ambani of Reliance Industries, reclaiming the title of India's wealthiest promoter.
Hospital chain Aster DM Healthcare's plans to sell its Gulf business may run into rough weather with voting advisory firm Institutional Investor Advisory Services (IiAS) raising concerns over the transaction. Recommending an 'against' vote on the resolution, IiAS has said there is no clarity on how Aster DM will utilise the proceeds that it will obtain by selling the unit, which contributes to bulk of its revenues. In November, Aster DM had announced its plans to sell its wholly-owned subsidiary Affinity Holdings, which conducts business in the Gulf Cooperation Council (GCC) region, to Alpha GCC for $1 billion.
The IPO boom in 2023 added four new promoters to the billionaires' list.
Only the top 5 per cent profit makers account for 75 per cent of profits.
Bharat Forge, the Pune-based automotive component maker, has been one of the top-performing companies in its segment. The company's stock price is up 39.3 per cent since the beginning of the 2023 calendar year, surpassing other leading automotive component makers such as Bosch and Samvardhana Motherson International. The stock also outperformed the benchmark BSE Sensex, which is up 17.3 per cent year to date so far.
Even as banks and finance companies are reporting record-high earnings, their weighting in the benchmark National Stock Exchange Nifty50 Index has seen a downward trajectory. Investors expect a stronger performance from other sectors in the new year. Currently, banking, financial services and insurance (BFSI) companies collectively hold a weighting of 34.5 per cent, down from 36.7 per cent at the end of December 2022 and a record high of 40.6 per cent at the end of December 2019. This represents the sector's lowest weighting in the index since December 2021 when it stood at 33.7 per cent.
Going 'long' is becoming an overcrowded trade on Dalal Street, and any negative trigger could lead to a sharp correction, warn experts. However, given the strong momentum, particularly in IT stocks, the downside could be protected in the immediate term. "With the Nifty50 surging to new life-time highs, the bulls remain in control. Further upsides are likely once the immediate resistance of 21,492 is taken out.
The gap between market capitalisation of Hong Kong and India has dwindled significantly. At present, India's market cap stands at approximately $4.3 trillion, while Hong Kong's is around $4.7 trillion. In the depths of the Covid-19 crisis in March 2020, Hong Kong's market cap, at $4.6 trillion, was 3.44 times larger than India's.
'The deal pipeline across products is robust for 2024.'
The Indian equity market valuation has been moving in tandem with the US 10-year treasury yield. While the benchmark US bond yield has witnessed a nearly 70 basis point decline since the end of October this year, dropping from 4.93 per cent to 4.23 per cent on Friday, the Sensex earnings yield has slipped by nearly 45 basis points - from 4.5 per cent to 4.05 per cent. Previously, Indian equities' earnings yields rose in sync with the US bond yields.
After a sharp rally in the equities market this year, investors could be better off rotating some funds towards the debt market. Experts believe several tailwinds could spur bond market returns over the next 12-18 months. These include India's robust macroeconomics, declining inflation, and the imminent passive flows of close to Rs 2.5 trillion on account of domestic sovereign bonds getting included in the JP Morgan global indices.
Global private equity (PE) firms are successfully offloading large equity stakes in domestic companies in the open market, taking advantage of buoyant conditions. Strong domestic liquidity support and an upward trending market have underpinned over a dozen PE exits worth $2.5 billion, data compiled by Business Standard shows. The figures exclude PE exits during maiden share sales and shares sold by strategic investors, such as SoftBank and Ant Group in new-age companies.
The past 18 months have seen a resurgence in the real estate industry, with developers regaining the ground lost to the Covid-19 pandemic. But it is once again adding inventory at a pace faster than sales. The industry's inventory rose by 28 per cent year-on-year (Y-o-Y) in H1FY24, com-pared to a 25.5 per cent year-on-year increase in net sales during the same period.
The National Stock Exchange (NSE) of India is going to indefinitely defer the internal deadline set for extending trading hours, according to sources in the know. The exchange aimed to introduce a three-hour evening session exclusively for index derivatives by March 2024, contingent upon regulatory clearance from the Securities and Exchange Board of India (Sebi). Sources indicate that the market regulator has not provided a favourable indication, dimming optimism surrounding the proposal.
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