Domestic Indices Take A Hit Again
The year 2021 has seen the highest-ever IPO volumes in the country with the volumes surging to USD 15.3 billion as against USD 4.2 billion in 2020.
Indian frontline equity indices Nifty 50 and Sensex slipped by 2.90 per cent and 2.83 per cent, respectively, during the fortnight on account of weak global cues as well as inflation and Omicron-related fears. Likewise, BSE Mid-Cap and Small-Cap indices corrected by 5.25 per cent and 3.60 per cent, respectively. Over the fortnight, Wipro replaced Bajaj Auto in the Sensex index. Recently, Government of India approved an incentive plan of Rs 76,000 crore (i.e. USD 10 billion) aimed at attracting semiconductor and display manufacturers. The production-linked incentive (PLI) scheme will see the extension of fiscal support of as much as 50 per cent of a project’s cost.
BSE Auto index fell by 4.13 per cent during the fortnight. Maruti Suzuki expects the next quarter to be its best this fiscal year as per its guidance to component suppliers since an improvement in chip supplies is helping the passenger vehicle market leader to produce and sell more cars and SUVs. Hero MotoCorp recently said that it will make an upward revision in the exshowroom prices of its motorcycles and scooters to partially offset an increase in input costs, with effect from January 4, 2022. “The price revision has been necessitated to partially offset the impact of steadily increasing commodity prices,” the company said in a statement.
BSE Metal and BSE Power indices ended the fortnight with losses of 3.25 per cent each. For the majority of 2021, Indian steel manufacturers benefited from high price realisations. But the December quarter has witnessed pressure on realisations. A combination of factors, including weak domestic demand, falling international steel prices and the rising threat from the Omicron corona virus variant, have weighed on domestic steel prices. However, with realisations expected to remain relatively soft, the drop in raw material prices offers respite.
The central public sector enterprises (CPSEs) of the power ministry registered a growth of 45 per cent in investment on capital expenditure in the current financial year till November, compared to the corresponding period of last year. In the current fiscal (2021-22) till November, the power sector’s state-owned companies have incurred capex worth Rs 32,137 crore. According to data compiled by PRIME Database Group, 63 Indian corporates raised an all-time high of Rs 1,18,704 crore through main board IPOs in 2021. This record amount was nearly 4.5 times Rs 26,613 crore raised through 15 IPOs in 2020 and almost twice the previous best year of 2017 in which Rs 68,827 crore was raised via the listing route.
The year 2021 has seen the highest-ever IPO volumes in the country with the volumes surging to USD 15.3 billion as against USD 4.2 billion in 2020. That means the street saw more IPOs in 2021 than in the year past three years combined, both in the number of listings and amount raised. As per Kotak Mahindra Capital Company, the IPO frenzy is set to continue next year with USD 26 billion worth of issues being in the pipeline. It added that the new issues will be dominated by resilient sectors such as new-age technology, healthcare, consumer, realty and speciality chemicals. Trading data shows that during the fortnight, DIIs were net buyers to the tune of Rs 13,643.33 crore and FIIs were net sellers to the tune of Rs 2,415.77 crore.
