Sensex Trades Flat; Tata Steel, Maruti & HDFC Bank Among Top Losers

The Nikkei dropped 1.1% while the Shanghai Composite plunged 2%. The Hang Seng is trading lower by 0.4%.

In US stock markets, Wall Street indices fell sharply on Monday, with the Nasdaq Composite confirming it was in a bear market, as the prospect of a ban on oil imports from Russia sent crude prices soaring and fueled concerns about rising inflation.

The Dow Jones Industrial Average tanked 2.3% while the Nasdaq stood as the worst loser and slumped 3.6%.

Back home, Indian share markets are trading on a negative note.

Benchmark indices opened in the negative territory following weak sentiments across the globe.

Market participants are tracking Dish TV share price as the market regulator has asked the satellite television broadcaster to disclose the results of its shareholders meeting held in December last year within 24 hours.

The BSE Sensex is trading down by 46 points. Meanwhile, the NSE Nifty is trading lower by 27 points.

NTPC and TCS are among the top gainers today. Hindalco, on the other hand, is among the top losers today.

The BSE Mid Cap index is up 0.8%. The BSE Small Cap index is trading higher by 1.2%.

Sectoral indices are trading mixed with stocks in the metal sector, auto sector and banking sector witnessing most of the selling.

Power stocks and IT stocks, on the other hand, are trading in green.

Shares of Power Grid and GMDC hit their 52-week highs today.

Gold prices are trading down by 0.1% at ₹53,492 per 10 grams.

Meanwhile, silver prices are trading up by 0.1% at ₹70,039 per kg.

In news from the currencies space, the rupee is trading at 77.02 against the US$.

Yesterday, the rupee tanked 84 paise to close at its lifetime low of 77.01 against the US dollar as intensifying geopolitical risks due to the Russia-Ukraine conflict pushed investors to safe haven assets.

Speaking of rupee, ace chartist at Equitymaster and editor of Fast Profits Report Brijesh Bhatia shared an insightful update on the rupee on his telegram channel.

As per Brijesh, the depreciating rupee will be the perks for IT sector and it may boost Nifty higher.

Here’s what Brijesh shared:

Indian Rupee depreciated to the historic low of 77.14 against dollar yesterday.

Since its pandemic low of 77.0080, it consolidated in the range of 72-77 for 23 months; finally it break the range.

I did a video last year stating the Rupee to head to 80 against Dollar.

Historically, the depreciating rupee have short-term pain on Indian equities but they tend to go hand-in-hand in the long-term (the percentage rise and fall may differ).

As Nifty corrected from 18,600 to ~15,700 level now, can the depreciating rupee be a last nail in the coffins for bears?

Additionally, the depreciating rupee will be the perks for IT sector and it may boost Nifty higher. IT sector weighs ~18% in Nifty which may trigger the reversal in the coming weeks.

Smart investors, by the thousands, have already joined Brijesh's telegram channel - Fast Profits.

If you're interested in being a part of Brijesh's charting journey as he shares how to create wealth from the profitable trade setup, we highly recommend you join his channel.

In latest developments from the IPO space, Sachin Bansal's Navi Technologies is set to file its draft papers with the markets regulator this week for a ₹40-bn initial public offering (IPO).

The company plans to launch its IPO in June, according to the current plans. Bansal, who launched Flipkart in 2007 and exited the firm after the Walmart deal in 2018, holds 97% in the firm. 

The public issue will be entirely through an issuance of new shares, with no offer-for-sale (OFS) component.

This means Bansal will not sell shares to investors in the planned IPO. Besides him, Ankit Agarwal, cofounder and chief financial officer at Navi, and Paresh Sukhtankar, former deputy managing director at HDFC Bank, hold stakes in the Bengaluru-based firm. 

Bansal, who has invested ₹40 bn of his own capital in Navi, is expected to retain majority control in the firm even after the IPO.

Navi Technologies turned profitable in fiscal year 2020-21 reporting consolidated profits of ₹710 m. The company also saw a spike in income as revenues grew to nearly ₹7.8 bn from ₹2.2 bn last year.

According to sources, Navi is tapping the public markets to feed its fast-growing businesses in personal loans and microfinancing, besides its own mutual fund business.

While Navi is looking to raise ₹40 bn in the IPO, it will also look to raise at least twice that amount through public debt later this year for its aggressive growth plans, which involve building a loan book worth ₹200 bn over the next two years. 

The company has charted plans to raise up to ₹150 bn as debt from the public markets over the next two years.

Navi’s current loan book is close to ₹36 bn in size. This includes home loans, personal loans and microfinance loans.

Note that the above IPO plans come at a time when India’s listed new-age companies are reeling under pressure and erode shareholders’ value. Even Life Insurance Corporation had filed for an IPO but the Ukraine-Russia crisis has put India’s biggest issue on hold.

Internet startups such as Delhivery and PharmEasy have got regulator’s approval for their IPOs but are now unlikely to launch them due to market conditions.

How this upcoming IPO sails through remains to be seen.

Moving on to stock specific news…

ONGC is among the top buzzing stocks today.

State-run oil and gas producer ONGC may weigh swap options such as crude oil against dividends receivable from its hydrocarbon blocks in Russia apart from other bargains if the Ukraine crisis persists for a longer period.

However, sustainability of these oil and gas blocks is a bigger concern given that major foreign explorers, many of which partner with ONGC, are exiting the assets, according to company sources.

As Russia faces sanctions from the US and its Western allies for invading Ukraine, the biggest casualty has been crude oil. Brent crude oil prices crossed US$100 per barrel mark on 27 February and are now hovering near US$130 per barrel.

Higher crude oil prices are an advantage for ONGC. The immediate concern, however, is that since Russian banks are blocked from the SWIFT facility, the company could face issues concerning repatriation of dividends.

In fiscal 2021, ONGC received ₹15.9 bn as dividend from its subsidiary ONGC Videsh for its JSC Vankorneft asset as against ₹4 bn in fiscal 2020.

ONG also owns 26% stake in Vankorneft field from where it secures dividend. The company also owns Imperial Energy, however, operations here are limited.

ONGC share price is currently trading down by 1.3%.

Speaking of ONGC, have a look at the chart below to see how the company has performed on the bourses.

This article is syndicated from Equitymaster.com