Sensex jumps 400 points as realty, finance stocks rally; Titan, HDFC top gainers

The Nikkei advanced 0.7% while the Hang Seng gained 0.3%. The Shanghai Composite is trading on a flat note.

In US stock markets, Wall Street indices ended a wobbly day of trading higher. The S&P 500 touched a record closing high and its seventh straight session of gains.

The Dow Jones Industrial Average ended flat, while the Nasdaq jumped 0.6%.

Back home, Indian share markets have opened on a strong note, following the trend on SGX Nifty.

After falling for three straight days, benchmark indices regained some strength today.

Reliance Industries, Hindustan Zinc, HDFC Life Insurance, and Tata Consumer Products are among companies that will announce their September quarter results today.

The BSE Sensex is trading up by 371 points. Meanwhile, the NSE Nifty is trading higher by 98 points.

Titan and HDFC are among the top gainers today. Asian Paints, on the other hand, is among the top losers today.

The BSE Mid Cap index and the BSE Small Cap index have opened higher by 0.7% and 0.8%, respectively.

Barring metal, all sectoral indices are trading in green with stocks in the realty sector and finance sector witnessing most of the buying.

Shares of RVNL and Shoppers Stop hit their 52-week highs today.

The rupee is trading at 74.80 against the US$.

Gold prices are trading up by 0.3% at ₹47,550 per 10 grams.

Meanwhile, silver prices are trading up by 0.4% at ₹65,254 per kg.

In latest developments from the IPO space, the long wait for Nykaa’s IPO is over as the online retailer of cosmetics and personal care products will launch its three-day initial public offering (IPO) on 28 October.

The company will raise as much as ₹52 billion from this share sale.

An anchor placement of up to ₹23.4 billion will open on Wednesday, 27 October and the IPO will close on Monday, 1 November.

The ₹52-billion Nykaa IPO includes a primary issue of stock worth as much as ₹6.3 billion, and an offer for sale (OFS) wherein existing shareholders will offload up to 43.11 million shares.

Investors who are likely to sell stake include TPG, Light House India Fund, JM Financial, Yogesh Agencies, Sunil Kant Munjal, Harindarpal Singh Banga, Narotam Sekhsaria and Mala Gaonkar.

Promoter Sanjay Nayar Family Trust will sell 4.8 million shares.

Founder Falguni Nayar and her family will continue to own a majority stake after the IPO. They currently hold more than 53% in FSN E-Commerce Ventures, the parent firm of Nykaa.

While all details are awaited, reports suggest that the company will seek a valuation of around $7.4 billion in the IPO.

Nykaa is among a few profitable retailers in India. It reported a net profit of ₹619.6 million in the fiscal ended March 2021, compared with a net loss of ₹163.4 million in the year-ago period.

Revenue grew 38% year-on-year (y-o-y) to ₹24.5 billion in fiscal 2021.

How this IPO sails through remains to be seen.

Moving on to stock specific news…

Indian Energy Exchange (IEX) is among the top buzzing stocks today.

IEX on Thursday reported a 69% jump in its standalone net profit at  ₹780 million for the September quarter as compared with ₹460 million in the year-ago period.

The company’s revenue from operations jumped 54% y-o-y to ₹1,091.6 million in the reported quarter.

During the quarter, the company’s cost remained largely constant at ₹179.7 million as against ₹178 million in the year-ago quarter.

IEX’s board also approved 2:1 bonus issues under which existing shareholders will get two shares for every one share held by them.

The company had announced this bonus news on 18 October after market hours.

According to the shareholding pattern, Dalmia Bharat Group cumulatively held 14.81% stake in IEX as on 30 September 2021. Of this, Dalmia Cement (Bharat) held 4.14% stake, Dalmia Power held 3.71% stake and DPVL Ventures LLP held 6.96% stake in IEX.

IEX is the first and largest energy exchange in India providing a nationwide, automated trading platform for physical delivery of electricity, Renewable Energy Certificates (RECs) and ESCerts (Energy Saving Certificates).

IEX share price opened the day up by 10% but pared gains and is currently up 4%.

Speaking of the power sector, it's interesting to note the power exchanged in India is about 4.5% of the overall power production, as can be seen in the chart below.

As per Tanushree Banerjee, co-head of research at Equitymaster, India's power sector is currently in transition. It's driven by increasing reliance on short-term contracts and electricity spot markets.

This transition to the short-term market is happening due to quickly evolving industry dynamics.

Tanushree believes the Indian power sector will see a surge in spot power volumes due to certain factors.

This article is syndicated from Equitymaster.com