Sensex, Nifty trade with small gains; Paras Defence IPO subscribed over 29 times

September 22,2021

The domestic equity barometers traded with small gains in mid afternoon trade. Metal stocks extended gains for the second day in a row.

At 14:24 IST, the barometer index, the S&P BSE Sensex, was up 81.23 points or 0.14% to 59,086.50. The Nifty 50 index advanced 28.35 points or 0.16% to 17,590.35.

The broader indices outperformed the benchmarks. The S&P BSE Mid-Cap index rose 1.61%. The S&P BSE Small-Cap index gained 1.39%.

Buyers outnumbered sellers. On the BSE, 2156 shares rose and 1021 shares fell. A total of 161 shares were unchanged.

In the broader market, Inox Leisure (up 12.89%), Gujarat Alkalies and Chemicals (up 11.97%), Godrej Properties (up 10.73%) and Indiabulls Real Estate (up 9.20%) were the top gainers.

Shriram City Union Finance (down 5.22%), KEC International (down 3.02%), Minda Corporation (down 2.99%), Aster DM Healthcare (down 2.80%) and Vodafone Idea (down 2.78%) were the top losers.

Zee Entertainment Enterprises (ZEEL) jumped 30% after the company said its board approved merger between the firm and Sony Pictures Networks India (SPNI).

ZEEL and SPNI have entered into a non-binding term sheet to combine both companies' linear networks, digital assets, production operations and program libraries. The term sheet provides an exclusive period of 90 days during which ZEEL and SPNI will conduct mutual diligence and finalize definitive agreements. The merged entity will be a publicly listed company in India.

The shareholders of SPNI, will hold a majority stake in the merged entity. The shareholders of SPNI will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately $1.575 billion at closing, for use in pursuing other growth opportunities.

As part of the transaction, Punit Goenka will continue to be the managing director and CEO of the merged entity. However, majority of the board of directors of the merged entity will be nominated by Sony Group.

Economy:

The Asian Development Bank on Wednesday revised down India's economic growth forecast for the current fiscal to 10%, from 11% predicted earlier, citing the adverse impact of the second wave of the pandemic.

The outbreak, however, dissipated faster than anticipated, resulting in several states easing lockdown measures and returning to more normal travel patterns. The economy is expected to rebound strongly in the remaining three quarters of FY2021, and grow by 10% in the full fiscal year before moderating to 7.5% in FY2022, said the Asian Development Outlook Update (ADOU) 2021.

In its Asian Development Outlook forecast in April this year, the multilateral funding agency had projected India to grow at 11% in the current fiscal year. Because consumption will recover only gradually, government spending and exports will contribute more to FY2021's growth than they did in the previous fiscal year, it had said about India.

Primary Market:

Paras Defence and Space Technologies IPO opened for subscription from Tuesday (21 September) and it will close on Thursday (23 September).

The offer comprises of a fresh issue of up to Rs 140.60 crore and an offer for sale of up to 17,24,490 equity shares (including anchor portion of 29,27,485 equity shares) in the price band of Rs 165 to Rs 175 per share.

As on 14:12 IST, the IPO received bids for 20.92 crore shares as against 71.40 lakh shares on offer. The issue was subscribed 29.30 times so far.

The company intends to utilize the net proceeds from the fresh issue towards purchase of machinery and equipment amounting Rs 34.657 crore, funding incremental working capital requirements amounting Rs 60 crore, repayment or prepayment of all or certain borrowings amounting Rs 12 crore and for general corporate purposes. As of 31 July 2021, its aggregate outstanding indebtedness was Rs 115.827 crore.

Paras Defence and Space Technologies is primarily engaged in designing, developing, manufacturing and testing of a wide range of defence and space engineering products and solutions.

Buzzing Index:

The Nifty Metal index rose 1.31% to 5,515.85, extending gains for second day. The stock has added 3.90% in two sessions.

Coal India (up 2.94%), Hindalco Industries (up 2.48%), National Aluminum Co. (up 1.86%), MOIL (up 1.63%), NMDC (up 1.61%), Jindal Steel & Power (up 1.33%), JSW Steel (up 1.31%) and Tata Steel (up 1.20%) advanced.

Numbers to Track:

In the foreign exchange market, the partially convertible rupee fell to 73.93 from its previous closing of 73.61.

MCX Gold futures for 5 October 2021 settlement rose 0.10% to Rs 46,685.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.06% at 93.26.

In the commodities market, Brent crude for November 2021 settlement rose $1.12 or 1.51% to $75.48 a barrel.

The yield on 10-year benchmark federal paper rose to 6.130% from its previous close of 6.122%.

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