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Today in the market, whether we talk about stocks or indices, the condition of all is bad. Nifty 50 also broke the low of 24550 today, proving the buying from Friday's low (24550) to be fake.
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| Nifty 50 index price |
Nifty and Sensex experienced significant declines of 1.3% and 1.2%, respectively, despite starting the day on a positive note. The escalation of geopolitical tensions in the Middle East, coupled with uncertainty surrounding the upcoming US elections, unsettled investors.
Midcap stocks fell sharply by 2.6%, while small-cap stocks suffered an even greater loss of 3.9%. A staggering 481 stocks within the NSE 500 index closed in negative territory, with no sector managing to finish in the green.
The most substantial losses were seen in PSU Banks, which dropped by 4.2%, followed by Real Estate at 3.4% and Metals at 3%.
In other news, Hyundai India's highly anticipated IPO did not meet expectations, raising concerns as more significant listings are expected soon; our lead story explores the reasons behind the frequent failures of large IPOs.
Paytm's stock plummeted by 6% following disappointing second-quarter results, while City Union Bank emerged as the top gainer in the NSE 500, buoyed by strong earnings.
Additionally, Garden Reach Shipbuilders, Mazagon Dock, and Amber Enterprises were among the biggest losers in the NSE 500 today, with further details available in the accompanying charts.
Ambuja Cements has announced its intention to acquire Orient Cement for a sum of Rs 8,100 crore, reflecting a decrease of 2% in its stock value.
Financial Results: Jana Small Finance Bank experienced a significant drop of 10% following a year-on-year net profit decline of 21%.
Bajaj Housing Finance maintained a stable position as its bottom line saw a year-on-year increase of 21%.
PNC Infratech faced a further decline of 7% today, marking its second consecutive day of losses after being blacklisted by the Government of India.
In the realm of initial public offerings, Waaree Energies' IPO was oversubscribed by a factor of 9, while Deepak Builders & Engineers' IPO garnered 12 times more bids on its second day.
Additionally, Sona BLW Precision Forgings has commenced production at its new facility in Haryana, focusing on its driveline business.
Closing Price Of Index:
| NIFTY | SENSEX | BANK NIFTY |
|---|---|---|
| 24,472 | 80,221 | 51,257 |
| -1.3% | -1.2% | -1.4% |
India's largest initial public offering (IPO) has not met expectations, resulting in a disappointing outcome. Hyundai Motor India shares ended at Rs 1,820 per share, reflecting a decline of 7% from their initial offering price.
Various factors contributed to this situation, and it is worth noting that many of India's significant listings have yielded mixed results. As other major IPOs, such as those from Swiggy and NTPC Green Energy, are anticipated, it is essential to review the performance of previous market entries.
1) LIC: Once a major player in the market, LIC's initial public offering (IPO) was valued at Rs 21,000 crore. However, on its first day of trading, the stock fell by 8% from its issue price. Even after two years, it remains down by 4% from the initial offer price of Rs 949 per share.
2) Paytm: Often cited as a prime example of overvaluation, Paytm's stock plummeted by 27% on its debut as investors expressed concerns regarding its financial losses. Currently, it is trading at Rs 699 per share, representing a staggering decline of 67% from its issue price of Rs 2,150 per share.
3) Coal India: This public sector undertaking (PSU) IPO was well-received, providing investors with a 40% gain on the listing day. Since 2010, the stock has nearly doubled in value, offering respectable returns, though not exceptional.
4) GIC: The state-owned insurance company experienced a lackluster market entry, closing its first trading day down 5% from its IPO price. Over the past seven years, the stock has significantly underperformed, plummeting by 59% from its initial price of Rs 912 per share.
5) SBI Cards: Launched just before the onset of the Covid lockdown, SBI Cards faced challenges, ending its listing day with a 10% loss. Currently, the stock trades at Rs 705 per share, which is 7% lower than its original issue price.
In summary, caution is advised when considering large IPOs; while there may be exceptions like Coal India, it is often the case that IPO bankers exhibit excessive greed.
Earnings Summary ( Quarterly Results of Stocks )
Paytm experienced a decline of 6% following its underwhelming Q2 performance. The gross merchandise value (GMV) increased by 5% quarter-over-quarter, falling short of the expected 8%, and remained unchanged year-over-year.
Additionally, the average number of monthly transacting users decreased by 9% quarter-over-quarter, reaching 71 million.
On a positive note, the company has made progress in reducing expenses, achieving a 17% decrease in indirect costs compared to the previous quarter, largely due to workforce reductions.
Furthermore, the number of new subscription-paying device merchant sign-ups has surpassed levels recorded in January 2024.
It is important to look beyond the reported bottom line, which was artificially inflated by a one-time gain of Rs 1,345 crore from the sale of its movie ticketing business to Zomato. Excluding this gain, the company would have faced a net loss of Rs 415 crore.
The Q2 report reveals the following key figures:
Revenue stands at Rs 1,660 crore, reflecting a 34% decline year-over-year. In contrast, profit has significantly improved, showing Rs 930 crore compared to a loss of Rs 291 crore in the previous year.
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| Paytm share price |
The overarching narrative remains that Paytm continues to face challenges. While it is encouraging to see a quarter-over-quarter increase in Gross Merchandise Value (GMV) and a resurgence of merchants, the most pressing concern may be the potential long-term impact on the Paytm brand, an issue for which the company has yet to find a resolution.
Year-to-date, Paytm has experienced an 8% increase.
City Union Bank experienced a notable increase of 13% in its stock value, emerging as the leading gainer on the NSE 500 following a strong performance in the second quarter.
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| City Union Bank stock price |
The bank benefited from robust credit demand, which significantly enhanced its lending income, resulting in a year-on-year growth of 12% in advances.
Additionally, its net interest margins improved to 3.67%, up from 3.54% in the previous quarter, defying the general trend in the industry, primarily due to reduced funding costs.
A key highlight of this quarter was the improvement in asset quality, marking a significant positive shift compared to the previous quarter's figures.
The bank's key financial metrics include a net interest income of Rs 583 crore, reflecting an 8% increase year-on-year, and a profit after tax of Rs 295 crore, which is a 2% rise compared to the previous year.
The gross non-performing assets (NPA) decreased to 3.54% from 3.88% quarter-on-quarter, while the net NPA also saw a decline to 1.62% from 1.87%.
Notably, Macquarie has assigned an outperform rating to the bank, setting a price target of Rs 185 per share, indicating a potential upside of 9% from current levels.
Year-to-date, City Union Bank has recorded an increase of 11%.
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