MarketBuzz
1212: Marketbuzz Podcast with Hormaz Fatakia: What keeps ITC, IIFL Finance, SJVN in focus
Good morning and welcome to CNBC TV-18's Market Bus Podcast with me, Hormos Patakia. Well, today's the weekly options expiry of the nifty banks. Small caps continue to be under pressure. A large block deal is set to take place in what promises to be another action-packed day for the markets. And we'll tell you all about that in the next five minutes. And we cannot not start about talking about ITC, where BAT's much-awaited block deal is finally set to take place today. ITC's largest shareholder launched its book last evening to sell around 3.5% stake in a deal that is valued at nearly 17,000 crore rupees. BAT will now have 180-day lock-in for any further stake sale. But this may be positive for the company, as one, it removes a major overhang. And two, BAT has mentioned multiple times in the past that it does not intend to bring its stake in ITC below 25%, which is what gives them veto rights. Now, ITC shares in anticipation of this deal have already corrected almost 20% from their peak that they hit in July of 2023. What this has also done is that it has continued this trend of foreign promoters or large shareholders selling shares in their Indian counterparts at very lofty valuations. Whirlpool's deal in February was a case in point as was Tim Ken and Samwadana Motherson. And you can read about all of that on cnbctv18.com. And as we speak, ITC has already received two upgrades from CLSA and HSBC. And both of them are saying that this correction that I just spoke about is a very attractive buying opportunity. So keep ITC on your radar. It may just be a market moving stock today. And since we are on this subject of promoter stake sales, here are some domestic ones as well. Macrotech's promoters sold on half a percent stake yesterday in a block deal, while Nerlon's promoters sold two and a half percent. But what is interesting in Nerlon is the name of the buyer, which was Nehar Nandan Nelikani, the son of Infosys co-founder Nandan Nelikani. Now, apart from this promoter stake sales, what has also been in trend recently are rights issues. Now, Grazim, South Indian Bank, India bull's housing finance and a lot of other companies have had rights issues recently. And joining this bandwagon is HCC or Hindustan construction company, where the board has approved details of a 350 crore P rights issue. Their rights issue will open on the 26th of this month and close on the 5th of April. Now, the rights issue price that they have fixed is 21 rupees a share, which is a 40 percent discount to the closing price of Tuesday of HCC stock. Now, if you are an existing shareholder, you will be eligible for one right share of HCC for every nine shares that you currently own. Also, keep an eye out on Orobindo pharma, where its unit, UGA pharma specialities has begun distribution of aseptic products manufactured at its unit three. Now, if you remember, this distribution was temporarily stopped recently and the commercial production from the aseptic lines is likely to start by the 15th of April. So, some positive news coming in there for Orobindo pharma. There's some interesting data that was released by novama alternative last evening, which will keep SJVN and a lot of other stocks in focus. But I'm talking SJVN particularly because two mutual funds, SBIMF and Quant, have made a complete exit from the stock in February. Now, SJVN stock has corrected over 30 percent from its peak, but it still trades above its five-year historical PE multiple. So, you'll keep an eye out on SJVN as well. A total of nine stocks are now in the FNO ban with NALCO and pyramal enterprises joining that list with Aditya Belafashan, Mahanagar Gas, Industan Copper, Sale, Tata Chemicals, Z Entertainment and a lot of others as well. So, nine stocks in the FNO ban today. Some board meetings as well, IFL Finance, which has been under fire recently will have its board meeting to consider a fundraising proposal as will GMR Power. As we told you earlier, today is the weekly options expiry of the nifty bank contracts and the index had a proper tug of war yesterday with HDFC bank fighting for the bulls single-handedly and was offset by SBI, ICICI bank and AXIS bank. Now, eventually, both nifty and the nifty bank ended absolutely flat yesterday. The real pain though, rise in the small cap index and another 2 percent drop on Tuesday and the index is now down 10 percent from its peak that it hit last month. Stocks like Angel 1, NBCC having corrected over 25 percent from their peaks and analysts who we spoke to seeing another 2 to 3 percent downside in the index before a floor or a support is found at lower levels. You can read more about that on our coverage on the small cap stocks on CNBCTV18.com. But the one solace for the market though is the fact that the US markets ended positive overnight shrugging off what was considered to be a sticky inflation print, although it was in line with expectations. Who led the gains there? Well, Nvidia, who else? The S&P 500 made a record closing high while the Dow Jones also gained 200 points. So, positive queues coming in from the US markets and on queue, the Asian markets have also opened higher. So, global queues are positive and the gift nifty is pointing to a flat start for our own markets. So, all eyes now on 9/15, all eyes on ITC and that's all for today. We wish you a wonderful trading day ahead and for the sharpest market insight and analysis stay tuned to cnbctv18 and cnbctv18.com. [Music]