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RBI Policy: MPC keeps repo rate unchanged at 4%

6. August 2021 Sandeep Stock Market Research (0)

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The RBI MPC said it will continue with the accommodative stance as long as necessary to support a struggling economy hit by the COVID-19 pandemic.

The Federal Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC), on Transfiguration, kept the repo rate -- the key lending rate at which banks lend short-term rates to banks -- unchanged at 4 percent. The monetary policy stance has been retained at 'accommodative'. An accommodative stance means a rate hike is unlikely.

The MPC said it'll continue with the accommodative stance as long as necessary to support a struggling economy hit by the COVID-19 pandemic. The announcement came in line with what most economists predicted within the backdrop of a persistently high retail inflation and uncertainty surrounding the expansion.

Governor Shaktikanta Das cautioned against the threat of a possible third wave of the pandemic and guaranteed that the financial institution will remain vigilant. “The need of the hour isn't to drop out the guard and remain vigilant against any possibility of third-wave especially within the backdrop of rising infections in certain parts of the country,” RB Governor Shaktikanta Das said announcing the monetary policy.

The MPC has cut key lending rates by 250 basis points since February 2019 to support growth. The rate-setting panel said it'll closely watch the inflation-growth scenario going ahead while deciding the course of policy actions.

The RBI has increased the retail inflation estimate for the fiscal year 2021-22 to 5.7 percent from 5.1 percent projected earlier while retained the GDP growth target for the fiscal year at 9.5 percent.

Price pressures have stayed high within the recent months. The closely tracked Consumer Price Index-based inflation (CPI) for the month of June rose 6.26 percent, as food prices hardened further, and transportation costs rose thanks to higher petrol and diesel prices. The June print came slightly less than 6.30 percent for May, which was the very best in six months but continues to be above the MPC’s temperature of 2-6 percent.

Das said while the recent inflationary trend has evoked concerns, this is often more transitory in nature. Das emphasized that the conduct of MPC has been geared to rejuvenate growth. "Continued policy support is required to nurture a nascent economic recovery," Das said.

Buy Vinati Organics; target of Rs 2300: ICICI Direct

5. August 2021 Sandeep Stock Market Research (0)

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ICICI Direct is bullish on Vinati Organics has recommended a buy rating on the stock with a target price of Rs 2300 in its research report dated August 02, 2021.

ICICI Direct's research report on Vinati Organics

Vinati Organics may be a leading manufacturer of specialty chemical and organic intermediaries with global market leadership in its two key products- 2- Acrylamido 2 Methylpropane sulfonic acid (ATBS) and Isobutyl Benzene (IBB). Starting with IBB and subsequent forays into IB, ATBS, Butyl phenols, the corporate is now moving towards antioxidants. the corporate has two manufacturing facilities at Mahad and Lote In terms of revenue contribution, ATBS constitutes ~40-50% of overall revenue followed by IBB of 20-30% while the remainder is from other segments like IB, Butyl phenols, and derivatives

Outlook

We retain a BUY rating on the rear of a far better growth outlook from ATBS and newer products like Butyl phenols and antioxidants We value Vinati Organics at 50x P/E FY23E EPS to reach a revised target price of Rs 2300/share (earlier Rs 2220/share).

Coming soon: Offshore campuses of Indian institutes

4. August 2021 Sandeep Stock Market Research (0)

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The effort is part of a brand-building exercise by the Indian government to portray India as an international study destination

Education ministry estimates indicate that on the brink of 200,000 students travel abroad per annum for education, leading to an outflow of just about Rs 50,000 crore ($6.7 billion) per annum.

Don't be surprised if your favourite college or university sets up a campus within us or UK . the govt, under the University Grants Commission (UGC), will now allow colleges and universities to line up offshore campuses abroad.

Sources said that detailed guidelines on the category of institutes, supported academic history, batch size and courses, are going to be released by the govt within the coming weeks.

“This is a component of brand name building of Indian institutes. at the present, India isn't top-of-mind for international candidates, especially from the West, and that we want to vary that,” a politician said.

Once the rules are released, it's likely that an initial list of institutes is going to be involved to measure their interest in fixing campuses abroad.

What does this involve?

The internationalisation of India's education system has been a key focus of the National Education Policy (NEP) – 2020.

Addressing a virtual gathering on July 29, Prime Minister Narendra Modi had said an 'office of international education has been found out at 250-plus universities in India and this may enable them to draw in foreign students.

Education ministry estimates indicate that on the brink of 200,000 students travel abroad per annum for education, leading to an outflow of just about Rs 50,000 crore ($6.7 billion) per annum.

Conversely, it's estimated that 48,000 international students study in institutes across India.

Promoting 'Brand India'

The education ministry wants to market 'Brand India' as a study destination through a mixture of schemes, including global campuses, incentives to foreign institutes to line up Indian campuses, also as 'twinning programmes'.

“Many institutes in India have international alumni who are now employed in large corporations. The institutes are going to be asked to form use of this alumni network as a part of the brand-building exercise,” another government official said.

Once the Indian institutes found out about offshore campuses, they're going to be ready to give international students a teaser of what's on offer. These students would then be encouraged to require up other programmes at the Indian campuses.

Will it work?

While the Indian regulatory agency for universities, the University Grants Commission, will give the go-ahead to line up offshore campuses, the important test would dwell on getting approvals from country-specific regulators.

In us or UK, as an example, new institutes (even offshore campuses) would wish to line aside fixed capital for college kids and infrastructure. an in-depth verification of the institute's financial background, statement of purpose and safety standards is additionally administered .

Prashant Maheshwari, a foreign education consultant based in New Delhi, told Moneycontrol that albeit the Indian government is in a position to secure faster approvals through its diplomatic relations with a rustic, the initial students would primarily be Indian.

“If you check out the US for instance, students are very wary of latest entrants. albeit an Indian institute that features a 100-year legacy sets up an offshore campus within the US, say, in popular locations like NY, Boston, Texas or Atlanta, the initial batches could consist mostly of persons of Indian origin,” he said.

However, unlike former US President Donald Trump, current President Joe Biden is receptive to new educational institutes being found out.

President Joe Biden had stated in February 2021 that he plans to extend grants for brand spanking new and existing education institutes to enhance graduation rates and reduce income disparities.

Here, any educational institute helping improve career outcomes for low-income students, students of colour, first-generation students, and students with disabilities are going to be provided funding.

In the UK, the USP of an institute and whether it's needed within the country is assessed before approval is granted. it's not an easy statement, but 'evidence of need', because the UK government puts it.

This would mean that an Indian institute fixing a UK campus would wish historical evidence of how it's essential for UK residents and the way different its courses would be from those offered by existing higher-education institutes. Final approvals are supported by this data.

The West Africa and East Asia opportunity

Stephen Duraiswamy, the Managing Partner at study-abroad advisory BreakHigh Consulting, explained that rather than aiming for the standard Western markets, Indian institutes looking to expand via offshore campuses should target markets like West Africa and East Asia.

“Places like Ghana, Senegal, Nigeria, Taiwan and Mongolia are where Indian institutes should eye a presence. These regions would enjoy quality international education and that they also are home to an outsized ex-pat community, which can aid brand building for Indian institutes," he added.

Twinning programmes would be a precursor to the present offshore campus expansion. Here, students from India could study one semester at an institute abroad through a partnership and the other way around.

Once the offshore campuses are found out, Indian students in domestic campuses could also get a chance to pursue a neighbourhood of their degree programmes at these international locations.

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IPO coming in August 2021

3. August 2021 Sandeep (0)

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Clean Science IPO subscribed 4.28 times on Day 2

If you missed investing in the IPO of the month of July, then do not think much about it because in the month of August many companies are coming with their IPO, which is starting on August 4, 2021. For more information contact Sharetipsinfo Investor Advisory. Friends, let us know which companies are coming in the month of August?

After the second wave of Corona, the Indian economy is slowly returning to normal. In the month of July, 6 companies got listed in the IPO and there was a very positive response from the investors. Looking at the reaction of the stock market, a total of 7 companies can be listed in the IPO in the month of August. Prominent names in this include Vindlas Biotech, Krishna Diagnostics, Devyani International Ltd., Shriram Properties, Fincare Small Finance Bank, Studds Accessories. Accessories Limited) etc.

List of IPOs Coming in August 2021

Devyani International Limited

Vindalas Biotech

Krishna Diagnostics

Star Health And Allied Insurance Company Limited

Shriram Properties

Studds Accessories Limited

Devyani International Ltd

Devyani International Limited was established in 1991 and is the largest franchisee of Yum Brands and one of the chain operators business of Quick Service Restaurants (QSR). Its IPO is likely to come on August 04, 2021, and will be open for investors from August 04, 2021, to August 06, 2021. The IPO size of Devyani International Limited can be Rs 1400 crore, its price band can be fixed at Rs 86 - 90 per share. The company can be listed on both the BSE and NSE stock exchanges.

Windlas Biotech

Vindalas Biotech is a Pharmaceuticals Formulation Contract Development and Manufacturing Organization (CDMO) company. The company works in the search and supply of generic drugs along with 2 new medicines. Vindalas Biotech has announced its IPO on August 04, 2021, and will be open for investors from August 04, 2021, to August 06, 2021. The IPO size of Vindalas Biotech is Rs 401.53 crore, the issue price band of the company is Rs 448 - 460 per share. The company is listed on both BSE and NSE stock exchanges.

Krishna Diagnostics (Krsnaa Diagnostics)

Krishna Diagnostics is one of the largest chain diagnostic companies in India. It provides services in private and public hospitals, medical colleges, radiology and pathology etc. Krishna Diagnostics has announced the date for its IPO, which will be open for investors from August 04, 2021 to August 06, 2021. The IPO size of Krishna Diagnostics is Rs 1200 crore, of which Rs 400 crore will be issued new shares. Company's issue price band 933 - Rs 945 per share. The company is listed on both BSE and NSE stock exchanges.

Star Health and Allied Insurance Company Limited

Star Health is one of the largest private-sector health insurance companies and the largest retail health insurance company in the country. The promoters of the company include the country's veteran investor Rakesh Jhunjhunwala. The IPO of Star Health and Allied Insurance Company Limited is likely to come in the month of August and the IPO size may be Rs 2,000 crore, the issue price of the company has not been decided. The company can be listed on both the BSE and NSE stock exchanges.

Fincare Small Finance Bank

Fincare Small Finance Bank is a Microfinance Institution (MFI) based in Bengaluru. It started as a non-banking finance company. Later it got the status of Small Finance Bank (SFB) by RBI. Fincare has filed a draft red herring prospectus with SEBI and the IPO size is likely to be Rs 1,330 crore. The IPO date of the company has not been announced yet. Fincare Small Finance Bank can be listed on both the BSE and NSE stock exchanges.

Shriram Properties

Shriram Properties is a Bangalore-based construction company. It is one of the leading construction companies in South India. Shriram Properties has filed a draft red herring prospectus with SEBI and plans to raise Rs 800 crore through IPO. The company may bring its IPO in the month of August but no date has been announced yet. Shriram Properties can be listed on both the BSE and NSE stock exchanges.

Studds Accessories Limited

Studds Accessories Limited, a Faridabad-based manufacturer of helmets and accessories for two-wheelers, has filed a draft red herring prospectus with SEBI and plans to raise Rs 98 crore through IPO. It may bring its IPO in the month of August but no date has been announced yet. Studds Accessories Limited can be listed on both the BSE and NSE stock exchanges.

Conclusion

There is very good news for the investors in the month of August. A total of 7 companies are going to be listed in Apna IPO in the Indian stock market. Some companies have announced the date of their IPO and the date of other companies has not been fixed. IPO is a very attractive investment option for investors but like any other stock in the stock market, investing in IPO is risky. Therefore, investors should consult an experienced and expert investment advisor before investing in an IPO.

To get in touch with Sharetipsinfo investment advisor, enter your information in the form below and our investment advisors will get back to you shortly.

Global inflation on the rise. Why aren’t central banks worrying?

3. August 2021 Sandeep Stock Market Research (0)

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Central banks are under pressure from rising inflation but so far they have brushed it aside as ‘transitory.’

The COVID-19 pandemic continues to challenge central banks. When the pandemic struck and economies nosedived, the pressure was on central banks to rescue and sustain the economy. This led to a fast opening of liquidity floodgates to stay the economy humming. A year later fortunes have changed. And now an increase in inflation has put pressure on central banks to tighten the hosepipes they opened last year. How do central banks deal with this sudden change of events?

The accompanying graph pictures this turnaround of fortunes during a few selected advanced economies. We see that since the pandemic in February 2020, inflation in these economies which was already less than the target of two percent, started drifting even lower. The low inflation indicated low demand which was due to global a slowdown as policymakers imposed lockdowns that curtailed economic activity.

From Jan 2021 onwards, we see rise in inflation due to stronger recoveries in economies and partly due to the bottom effect. In its June 2020 outlook, the International fund had projected the planet economy and advanced economies to shrink 4.9 percent and eight percent respectively in 2020. Since then, IMF has upgraded its forecast in subsequent outlooks. within the recent July 2021 outlook, it said the planet economy and advanced economies contracted 3.2 percent and 4.6 percent in 2020.

Central banks have come struggling thanks to this sudden rise in inflation. However, thus far they need stayed faraway from tightening monetary policy. The catchword for central banks regarding inflation is ‘transitory’ as seen in recent monetary policy statements of Federal Reserve System , European financial institution and Bank of England. IMF’s July outlook also used an equivalent word.

Why aren’t central banks worried? There are multifold reasons.

First, central banks actually are going to be proud of inflation being above target. For nearly a decade now, the inflation in developed countries has been less than targeted resulting in criticism. This was obviously ironical as central banks are often criticized for higher inflation. The Federal Reserve System even tweaked its framework from inflation targeting to average inflation targeting (AIT). Under AIT, if inflation has been lower for a particular period, the Federal Reserve System will allow inflation to be higher in order that average inflation over the whole period to be 2 percent.

Second, there's still slack within the economy and growth and unemployment are still not at pre-pandemic levels. this needs continued support from central banks.

Third, inflation has risen thanks to supply chain disruptions which are gradually easing with rising vaccinations and normalcy.

Fourth, commodity prices have also played a task within the recent rise in inflation. Core inflation, which excludes fuel and food prices, is high only within the case of the US.

Fifth, high inflation is additionally on account of the bottom effect. The chart shows that inflation ebbed in Feb 20 then begins to rise in Feb 21 (For the Euroarea, in December). So, albeit the inflation index has increased marginally from Feb 2021, the change from last year are going to be magnified as index had dipped last year. this is often the bottom effect. As a result, IMF within the July 21 outlook notes “the current spikes in annual inflation partially are the results of mechanical base effects from last year’s low commodity price”.

Last but not least, is that the important factor of inflation expectations. If inflation expectations also go up, then central banks poise themselves for action. In the US, while survey-based inflation expectations have edged up, those tracked by financial markets have remained on the brink of the inflation target. In Europe and UK, inflation expectations are broadly anchored.

Having said that, if current inflation remains elevated, inflation expectations also will inch up creating concerns for central banks.

Coming to Emerging and Developing countries (EDCs), inflation has risen there too. Unlike developed countries, EDCs are never during a comfortable position on the inflation front as food prices have both higher weightage within the inflation basket and influence inflation expectations.

On the highest of it, EDCs also will be watching inflation trends in developed countries. If inflation continues to travel up in developed world, pushing central banks to tighten monetary policy before expectations, one could see capital outflows from the EDCs. this is often what we saw in 2013 when Fed chair Ben Bernanke just announced the likelihood of tapering policy resulting in tantrums and chaos in EDC markets.

To sum up, inflation seems to be back after being within the wilderness for quite a decade. Ever since the 2008 crisis, economists are divided inflation in two camps. The pessimists have constantly warned that inflation is round the corner. On the opposite hand, the optimists have suggested that central banks needn't worry about inflation and will instead specialize in growth.

When inflation had remained muted, the policy weight was towards the second camp. The virus shock has brought inflation back to the discussion. Developed country central banks might not be worried over inflation now, except for how long is yet to be seen.

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Share Market Closing Note

2. August 2021 Sandeep Stock Market Research (0)

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Benchmark indices ended higher with Nifty above 15,850 on August 2 led by the auto, realty, and oil & gas stocks.

At close, the Sensex was up 363.79 points or 0.69% at 52,950.63, and the Nifty was up 122.20 points or 0.78% at 15,885.20. About 2007 shares have advanced, 1071 shares declined, and 136 shares are unchanged.

Shree Cements, Titan Company, BPCL, Grasim Industries, and Eicher Motors were the top Nifty gainers. UPL, Tata Steel, Bajaj Finserv, Bajaj Finance, and NTPC were among the top losers.

All the sectoral indices ended in the green with auto, IT, oil & gas, and realty indices up 1-4.5 percent. The midcap and smallcap indices added 1 percent each.

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Topic :- Time:3.00 PM

Nifty spot if closes above 15900 level then expect some further up move in coming sessions and close below above-mentioned level will result in some sluggish movement. Avoid open positions for tomorrow.

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Topic :- Time:2.20 PM

Just In:

HDFC Q1 results: Net profit falls 1.7% to Rs 3,000.7 crore, NII up 22% at Rs 4,146.7 crore

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Topic :- Time:2.10 PM

15900 Nifty spot to act as an important level for further upmove and if it breaks and trade below 15860 levels then some decline can follow in the market.

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Topic :- Time:1.30 PM

COPPER Trading View:

COPPER is trading at 755. If it breaks and trades below the 754.60 level then expect some decline in it and if it manages to trade and sustain above the 755.20 level then some upmove can follow in it.

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Topic :- Time:1.00 PM

Nifty is going strong. Nifty spot if manages to trade and sustain above 15900 levels then expect some quick upmove and if it breaks and trade below 15860 levels then some decline can be seen in the market.

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Topic :- Time:12.30 PM

Just In:

Reliance Retail to buy out Subway India for Rs 1,488-1,860 crore.

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Topic :- Time:12.20 PM

Just In:

PolicyBazaar Files DRHP for IPO, Looks To Raise Up To Rs 6,017.5 Crore.

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Topic :- Time:12.00 PM

Nifty is still going strong. Nifty spot if manages to trade and sustain above 15900 levels then expect some further upmove and if it breaks and trade below 15860 levels then some decline can be seen in the market.

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Topic :- Time:11.30 AM

News Wrap Up:

1. Sensex up 350 pts; BSE Midcap & Smallcap indices hit record peaks

2. Realty shares in demand; Oberoi, IB Realty, Prestige Estates, Sobha up 5%

3. Factory growth rebounded in July, hiring resumed after 15 months

4. NSE seeks Sebis go-ahead for IPO amid pressure from shareholders

5. UltraTech Cement accounts for 77% of Aditya Birla Groups profit in FY21

6. Small business suffer as banks shut current accounts after RBI circular

7. Unacademy raises $440 million in fresh funding at $3.44 billion valuation

8. Covid-19 in numbers Cases 31,695,958 | Deaths 424,773 | Vaccination 472,223,639

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Topic :- Stocks under F&O ban on NSE

1. Sun TV Network

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Topic :- Stocks in News

Britannia Industries: The company reported lower profit at Rs 387 crore in Q1FY22 against Rs 542.7 crore in Q1FY21, revenue fell to Rs 3,403.5 crore from Rs 3,421 crore YoY.

Equitas Small Finance Bank: The company reported sharply lower profit at Rs 12 crore in Q1FY22 against Rs 58 crore in Q1FY21, net interest income increased to Rs 461 crore from Rs 404 crore YoY.

Cholamandalam Investment: Board approved raising up to Rs 28,000 crore via non-convertible debentures. The company reported lower standalone profit at Rs 326.80 crore in Q1FY22 against Rs 430.93 crore in Q1FY21, revenue from operations increased to Rs 2,466.89 crore from Rs 2,113.63 crore YoY.

Bandhan Bank: The bank reported sharply lower profit at Rs 373.1 crore in Q1FY22 against Rs 549.8 crore in Q1FY21, net interest income rose to Rs 2,114.1 crore from Rs 1,811.5 crore YoY.

UPL: The company reported higher profit at Rs 749 crore in Q1FY22 against Rs 653 crore in Q1FY21, revenue rose to Rs 8,515 crore from Rs 7,833 crore YoY.

Tata Motors: The companys sales in the domestic & international market for July 2021 stood at 54,119 vehicles, compared to 27,711 units during July 2020.

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Topic :- Results on August 2

HDFC, Punjab National Bank, Emami, Ajmera Realty & Infra, Balaji Amines, Carborundum Universal, Castrol India, CG Power and Industrial Solutions, Nahar Spinning Mills, Orient Cement, RBL Bank, Shree Renuka Sugars, and Varun Beverages will release quarterly earnings on August 2.

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Topic :- Nifty Opening Note

Indian Stock Market Trading View For 02 Aug,2021:

Nifty to turn volatile as the day progresses. Global cues to dictate trend. Stock specific action expected in the market. Use all decline as an opportunity to go long..

Nifty spot if manages to trade and sustain above 15800 level then expect some quick upmove and if it breaks and trade below 15720 level then some decline can be seen in the Nifty. Please note this is just opening view and should not be considered as the view for the whole day.

Please visit again this section for live stock market and commodity market updates.

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Inflation rising, MPC will have to tread a cautious path, says Upasna Bhardwaj of Kotak Mahindra Bank

2. August 2021 Sandeep Stock Market Research (0)

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Beyond August, we expect the onset of gradual monetary policy normalization, with liquidity management tools at the fore to reset the floor rate slowly within the policy corridor. For sure, the RBI will need to be more agile in using a variety of tools to calibrate the policy.

The Reserve Bank of India's monetary policy committee's (MPC) dilemma has worsened since it last met in June, with the two inflation readings released after the meeting shooting past the central bank's upper tolerance band of 6 percent.

The high-frequency data continues to improve, signalling that the worst is behind us. MPC’s statement and the minutes both had highlighted the upside risks to inflation, with adequate reference to the need for the government to take measures on the supply-side inflation.

However, we haven’t seen much traction on that front, which continues to keep upside risks to inflation intact. The progress of the monsoon has been tepid, weighing on kharif sowing, which remains about 8.9 percent lower than the last year.

The rains in the coming two months will be crucial to buffer from further supply shocks. More importantly, even before the inflation overshot, some MPC members in the June minutes were cautious on inflation, with one member noting that “clear signs of generalization in CPI (consumer price index) inflation setting in could be a tipping point where growth-inflation dynamics could alter”.

The members also highlighted that the “scope for accommodation existed since CPI inflation remained within the tolerance band”.

While we believe that inflation may trend below 6 percent from the next reading but upside risks remain amid weak monsoons and elevated global commodity prices.

Against this backdrop, MPC will have to tread carefully in managing the forward guidance, both on the policy and liquidity front. We believe that RBI’s room to ignore the inflationary risks is becoming increasingly difficult and it will soon have to get into action, though gradually.

In response to the inflationary threats, several emerging central banks have started to either hike policy rates or are tilting towards it. A few central banks in developed economies have started tapering or ending their pandemic relief asset purchase programmes.

There is already a growing debate on the timing, scale and pace of the RBI’s process of policy normalisation. Any guidance on the durability of the accommodative policy would bring in some sanity in the market.

Although as a lead signal, RBI is slowly letting lose its hold on bond yields and allowing a gradual settling on higher levels.

While in the upcoming policy we expect a status quo on rates and stance, the focus will be on the underlying tone of the statement, given the increasing risks of inflation.

We expect the RBI to revise its inflation outlook trajectory by 30-50bps across quarters, while the growth forecast of 9.5 percent may be only marginally tweaked accounting for the upside to their Q1FY22 projections— the central bank’s recent bulletin provides an estimate for Q1FY22 GDP of 22.1 percent compared to 18.5 percent mentioned in the June policy.

While near-term growth-related uncertainties will hold back MPC from changing the monetary policy stance in the August policy, it will be interesting to see any split in the voting pattern, given the improving growth momentum amid increasing inflationary risks.

Beyond August, we expect the onset of gradual monetary policy normalization, with liquidity management tools at the fore to reset the floor rate slowly within the policy corridor. For sure, the RBI will need to be more agile in using a variety of tools to calibrate policy.

Tools like the overnight voluntary retention route (VRR), increase in quantum of 14-day VRR and allowing non-bank participation in the VRR could be the playbook before a reverse repo hike in December.

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