DIIs and FIIs Boost Market Momentum: Key Trends and Insights

DIIs Net Buy ₹874 Crore, FIIs Add ₹483 Crore in Market Surge

On September 17, 2024, Domestic Institutional Investors (DIIs) and Foreign Institutional Investors (FIIs) injected fresh capital into the stock market, leading to significant market activity. DIIs made net purchases of ₹874 crore, while FIIs added ₹483 crore worth of shares, as per provisional data from the NSE.

Key Market Movements:

• DIIs bought shares worth ₹10,960 crore and sold equities worth ₹10,086 crore.
• FIIs purchased stocks valued at ₹13,095 crore, while selling ₹12,613 crore during the same trading session.

Year-to-Date Overview:

• FIIs have been net sellers this year, offloading stocks worth ₹1.33 lakh crore.
• In contrast, DIIs have been consistent buyers, accumulating shares worth ₹3.30 lakh crore so far in 2024.

Market Performance: The trading day saw a slight uptick, with the Sensex closing 80 points higher at 83,068, a 0.1% increase, and the Nifty adding 34 points, settling at 25,418.50. Despite this, the overall market sentiment remained mixed, as 1,616 stocks advanced while 2,176 stocks declined.

Sectoral Gains and Losses: Sectors such as Nifty Realty, Consumer Durables, and Auto led the gains, while Media, PSU, and Metal sectors posted losses, reflecting the uneven market sentiment.

Expert View: Vikram Kasat, Head of Advisory at PL Capital, highlighted the cautious market outlook, citing global macroeconomic pressures and a weakened rupee as contributing factors. He emphasized that while some sectors showed strength, upcoming policy announcements are keeping investors on edge.

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Jubilant Ingrevia Shares Surge on Target Upgrade: 25% Upside Potential

Jubilant Ingrevia's shares experienced a notable increase of over 6% to Rs 717 apiece on September 4, following Equirus Capital's upgrade of its target price to Rs 900. This new target suggests a potential upside of 25% from current levels.

The upgrade from Equirus Capital was prompted by the recent shutdown of Pyridine production by global specialty chemicals maker Vertellus in the US. Pyridine, a solvent used in various industries including paint, rubber, and pharmaceuticals, has seen increased costs, which are expected to drive up prices of niacinamide. This price increase is anticipated to enhance profitability in both specialty chemicals and nutrition segments for Jubilant Ingrevia.

At 11:09 am, Jubilant Ingrevia's shares were trading at Rs 723.15, reflecting a 7.3% rise.

Equirus Capital noted that rising Pyridine costs could benefit Jubilant Ingrevia's near-term performance, particularly as the company explores opportunities in the semiconductor industry and aims to secure large contracts to meet its FY29E growth targets.

Despite a 4.7% decline in revenue and a 15.5% drop in profit-after-tax year-on-year for the June quarter, the company remains optimistic. Management expects improvements across all business segments in FY25.

Jubilant Ingrevia's shares have surged over 40% this year, significantly outperforming the benchmark Nifty 50, which has risen 16%.

*Disclaimer: Investment views expressed by experts are their own. Users are advised to consult certified experts before making investment decisions.*

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Mazagon Dock, GRSE Surge on Anticipation of New Naval Warship Orders

Shipping stocks, including Mazagon Dock and GRSE, experienced a significant rally on September 3, following reports that the Defence Acquisitions Council (DAC), chaired by the Defence Minister, is likely to approve defense deals worth Rs 1.3 lakh crore. This includes a substantial order for seven new naval warships, estimated to be around Rs 70,000 crore.

 

This expected approval has sparked optimism in defense-related stocks, signaling increased government spending and strategic investments that are anticipated to benefit key players in the shipbuilding sector. Shares of Mazagon Dock soared by 7%, while Garden Reach Shipbuilders & Engineers (GRSE) rose 6%, and Cochin Shipyard gained 3.84%, trading at Rs 1,922.40 on the NSE.

 

The broader interest in defense stocks has been further fueled by Hindustan Aeronautics (HAL) securing a Rs 26,000 crore order. Additionally, the Indian Navy is expected to receive a significant boost in the coming months, with the approval of indigenous construction for three more Kalvari-class submarines by the end of the year.

 

As the Indian Navy seeks to enhance its capabilities amid a deteriorating strategic environment in the Indo-Pacific, the DAC may soon be approached to build advanced Project 15-class destroyers, equipped with anti-ballistic missile systems and drone launch capabilities.

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IREDA IPO: GMP, what are the subscription status signals? Allotment Date, How to Check Status

The Indian Renewable Energy Development Authority (IREDA) IPO concluded its subscription period on Thursday, receiving robust interest from investors. The overall subscription status stood at 38.80 times, with the retail portion being subscribed 7.73 times. The tentative allotment date for the IREDA IPO is expected to be November 28, 2023, with the likely listing date set for November 29, 2023.

In the gray market, which operates as an informal trading platform, the premium for IREDA Ltd shares has risen to ₹13, reflecting the heightened interest in the public offering. Market observers noted a significant increase in the gray market premium (GMP) from ₹7 to ₹13 over the past week, underscoring the buzz surrounding the IREDA IPO in the primary market. Despite recent market fluctuations, the gray market has remained bullish, and analysts anticipate further upside if there is a reversal in the market trend when the Indian stock market reopens on Tuesday after the Monday holiday.

While the GMP serves as an indicator of market sentiment, experts caution that it does not necessarily determine the success or failure of an IPO. They emphasize the importance of considering fundamental factors and evaluating the company's balance sheet. It's noted that the gray market is speculative and unregulated, lacking a direct connection to the company's financials.

During the three-day bidding period from November 21 to November 23, 2023, the IREDA IPO garnered substantial interest across investor categories. Qualified Institutional Buyers (QIBs) led with a subscription of 104.57 times, followed by the non-institutional investor (NII) segment at 24.16 times, and the employee segment at 9.80 times.

Upon the announcement of share allotment, investors can check the IREDA IPO allotment status online through the BSE website or the official registrar's website, Link Intime Private Limited. The BSE direct link for checking allotment status is bseindia.com/investors/appli_check.aspx, and for Link Intime, investors can use the link linkintime.co.in/mipo/ipoallotment.html. The status can be accessed by entering the IREDA IPO application number and PAN details.

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US Indices end up sharply with tech after strong jobs, slower wage growth

US stocks saw a robust rally on Friday, led by the technology sector, as investors analyzed a jobs report indicating a broad increase in US hiring in September along with a slowdown in wage growth.

The S&P 500 and Nasdaq experienced their most significant daily percentage gains since late August, and the S&P 500 managed to end the week on a positive note, breaking a four-week losing streak.

The information technology sector saw the most significant gains among S&P 500 sectors, closely followed by communication services.

Initially, stocks dipped in response to the jobs data, which revealed the most substantial increase in US employment in eight months for September. However, they began to rebound later in the morning.

Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, noted, "You have an economy that's slowing, but not faltering, and you have a Federal Reserve on the sidelines." He also pointed out that the S&P 500 seemed to bounce back after nearing its 200-day moving average, currently around 4,208.

Market observers have been assessing whether the Fed might halt its interest rate hikes following a recent surge in long-term US Treasury yields. Benchmark 10-year US Treasury yields reached 16-year highs on Friday.

The day's data also revealed a moderation in wages, possibly due to the majority of jobs added last month being in lower-paying industries.

For the day, the Dow Jones Industrial Average rose by 288.01 points or 0.87% to reach 33,407.58, the S&P 500 gained 50.31 points or 1.18% to close at 4,308.5, and the Nasdaq Composite added 211.51 points or 1.6% to end at 13,431.34.

Over the week, the S&P 500 recorded a 0.5% increase, while the Dow declined by 0.3%, and the Nasdaq saw a 1.6% rise.

These recent gains followed significant losses in the stock market during September and the third quarter.

Investors are eagerly awaiting data on September consumer price inflation and producer price index readings due next week. Additionally, they are anticipating the upcoming quarterly earnings season, with major banks such as JPMorgan Chase (JPM.N) scheduled to report next week.

Exxon Mobil's shares experienced a 1.7% decrease after reports suggested that the US oil producer was in advanced talks to acquire Pioneer Natural Resources. Conversely, Pioneer's stock surged by 10.4%.

The volume of shares traded on US exchanges reached 10.58 billion, slightly lower than the 10.72 billion average for the full session over the last 20 trading days.

Advancing issues outpaced declining ones on the NYSE with a ratio of 1.96-to-1, while on Nasdaq, the ratio favored advancers at 1.73-to-1.

The S&P 500 recorded six new 52-week highs and 52 new lows, while the Nasdaq Composite marked 27 new highs and 260 new lows.

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Over 100 Small-Caps Record Impressive Gains as Broader Indices Reach New Highs

This week marked a notable performance in the Indian stock market, with both the BSE Sensex and Nifty50 indices displaying significant strength. The BSE Sensex surged by 0.77 percent, gaining 500.65 points to reach a closing level of 65,387.16. Simultaneously, the Nifty50 index also showed resilience, adding 0.87 percent and concluding the week at 19,435.30.

The positive momentum in the market was primarily driven by encouraging economic indicators. Strong GDP figures and robust manufacturing PMI data for the first quarter of the fiscal year provided a boost to investor confidence. These favorable economic signals helped the benchmark indices break a five-week losing streak, overshadowing concerns such as a weak monsoon, rising crude oil prices, and mixed global market trends.

What's noteworthy is that it wasn't just the large-cap indices that demonstrated resilience. The broader market segments outperformed expectations, with the BSE Mid-cap, BSE Small-cap, and BSE Large-cap indices recording gains of 2.3 percent, 3.8 percent, and 1 percent, respectively.

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, commented on this week's market performance, emphasizing that "Indian equities posted healthy gains." Both the BSE-30 and the NSE-50, representing large indices, delivered weekly returns of close to 1 percent, showcasing the broad-based optimism in the market. Chouhan also noted that mid-cap and small-cap indices in India outperformed their large-cap counterparts, indicating a well-rounded market rally.

In terms of sectoral performance, the BSE Metals and BSE Realty indices took the spotlight, with weekly gains exceeding 5 percent. Additionally, sectors such as BSE Commodities, BSE Auto, BSE Capital Goods, and BSE Power posted robust weekly gains. However, the BSE FMCG index experienced a 0.5 percent decline during the week.

Chouhan added that "India's real GDP growth in Q1FY24 came in at 7.8 percent," further contributing to the positive sentiment in the market. He also highlighted that the market would closely monitor the impact of a weak monsoon in August and the rise in crude oil prices in the near term.

In terms of sector-wise performance, the BSE Metal index registered an impressive 6 percent jump, while the BSE Realty index surged by 5.7 percent. The BSE Telecom index climbed 4.5 percent, and both the BSE Power and Auto indices saw gains of 3.4 percent each. In contrast, the BSE FMCG index experienced a 0.5 percent decline.

The BSE Small-cap index emerged as a standout performer, surging by 3.8 percent. Several small-cap stocks made notable gains, including Railtel Corporation of India, India Pesticides, Optiemus Infracom, HLV, Take Solutions, RattanIndia Power, Atul Auto, Jai Balaji Industries, Gokaldas Exports, Cerebra Integrated Technologies, Pokarna, Uflex, Coffee Day Enterprises, Skipper, and Sharda Motor Industries, all recording gains ranging from 25 to 46 percent.

On the flip side, GNA Axles, Digispice Technologies, Kuantum Papers, Waaree Renewable Technologies, Newgen Software Technologies, and Electronics Mart India witnessed declines ranging from 10 to 46 percent.

Foreign institutional investors (FIIs) continued their selling trend for the sixth consecutive week, divesting equities worth Rs 4,311.58 crore. In contrast, domestic institutional investors (DIIs) exhibited a contrasting trend by purchasing equities worth Rs 9,570.03 crore. For the month of August, FIIs sold equities worth Rs 20,620.65 crore, while DIIs bought equities worth Rs 25,016.95 crore.

**Nifty50 Outlook**

Amol Athawale, Vice President - Technical Research at Kotak Securities, analyzed the daily and intraday charts of the Nifty and identified a double bottom formation, indicating a strong possibility of an upcoming rally. A long bullish candle on the daily charts further supported the case for a continued uptrend. Key support was expected at 19,350, while the index could potentially rally towards 19,575. However, a breach of support at 19,350 might expose the uptrend to potential declines towards 19,275-19,220.

For Bank Nifty traders, the crucial support level was identified at 44,200. A move above this support could lead to gains towards 44,700 and 45,000. Conversely, a breach of 44,200 could result in a retreat towards 43,900-43,700 levels.

Jatin Gedia, a Technical Research Analyst at Sharekhan by BNP Paribas, provided a technical perspective on the Nifty's performance. He noted a notable rebound from the 19,250 zone, where buying interest emerged. Daily and hourly momentum indicators signaled a positive crossover with divergence, indicating a bullish outlook in the short term. Additionally, on the weekly charts, the Nifty managed to close in positive territory after five consecutive weeks of decline, suggesting that it has reached a region where buying interest is evident.

In conclusion, the Indian stock market displayed remarkable strength during the week, fueled by positive economic data and robust sectoral performances. While there are potential challenges on the horizon, such as a weak monsoon and rising crude oil prices, the short-term outlook appears optimistic, with key support and resistance levels to monitor in the Nifty and Bank Nifty indices.

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Vishnu Prakash R Punglia IPO: Infrastructure Firm Sets August 24 Opening, Price Range at Rs 94-99 per Share

Infrastructure company Vishnu Prakash R Punglia is poised to launch its Initial Public Offering (IPO) on August 24, offering its equity shares in a price band of Rs 94-99 each. The public issue, consisting of 3.12 crore equity shares, is exclusively a fresh issue by the company.

The IPO also includes a reserved portion of 3 lakh equity shares for its employees, granting them shares at a discounted rate of Rs 9 per share from the final offer price. With plans to raise approximately Rs 308.88 crore through the public issue at the upper price band, the Rajasthan-based engineering, procurement, and construction company aims to channel these funds towards capital expenditure and working capital requirements.

The offering is set to conclude on August 28, while the anchor book will open for a single day on August 23. Prospective investors can bid for a minimum of 150 equity shares and in multiples of 150 shares thereafter. Qualified institutional buyers will have access to half of the issue size, while 15 percent is reserved for high-net-worth individuals (HNIs), and the remaining 35 percent is earmarked for retail investors.

Vishnu Prakash R Punglia, known for its experience in designing and constructing various infrastructure projects, is particularly focused on water supply projects (WSPs). The company has successfully executed over 75 WSPs to date, with 38 WSPs currently under execution. Boasting a strong clientele across different government departments, the company's robust order book includes over 85 projects completed and 51 ongoing projects spread across 9 States and 1 Union Territory.

While the fiscal year 2022-2023 witnessed the company doubling its net profit to Rs 90.64 crore, revenues from operations during the same period surged by 48.7 percent to Rs 1,168.4 crore. Notably, the company has managed to achieve a CAGR of 55.10 percent in its topline growth from FY21 to FY23. Despite the impressive performance, the company's debt has risen, reaching Rs 250.4 crore in FY23, compared to Rs 176.6 crore in FY22 and Rs 110.8 crore in FY21.

The IPO's merchant bankers include Choice Capital Advisors and Pantomath Capital Advisors, while Link Intime India will serve as the registrar.

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