Hindalco Dividend and Capex Plan, Heranba IPO, and Buzzing Stocks Today

Wed, 24 Feb Pre-Open | Monish Vora, TM Team

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Indian share markets witnessed volatility throughout the day yesterday and ended on a flat note.

At the closing bell yesterday, the BSE Sensex stood higher by 7 points.

Meanwhile, the NSE Nifty ended up by 32 points.

ONGC was among the top gainers. Kotak Mahindra Bank, on the other hand, was among the top losers.

The BSE Mid Cap index ended up by 1%. The BSE Small Cap index ended higher by 0.7%.

Sectoral indices ended on a mixed note with stocks in the metal sector and oil & gas sector witnessing buying interest.

Banking stocks and finance stocks, on the other hand, witnessed selling pressure.

From the defence sector, shares of Cochin Shipyard surged 11% intraday yesterday after the company received order from the Indian Navy. The stock ended close to its 52-week high of Rs 396.

The company has been declared as L1 or lowest bidder in the tender floated by the Indian Navy for construction of 6 numbers of Next Generation Missile Vessels (NGMV) and the estimated total order value is around Rs 100 billion, Cochin Shipyard said in a regulatory filing.

Speaking of the defence space, co-head of Research at Equitymaster, Tanushree Banerjee keeps a close watch on stocks in this sector. As per her, defence will be a big wealth-creating opportunity.

Back in June 2020, she recorded a video about India's best defence stocks.

You can watch the video here: The Upside in India's Best Bulletproof Defence Stocks

Watch Now: 3 Little-known Stocks We are Super Bullish On

Gold prices for the latest contract on MCX were trading down by 0.3% at Rs 46,760 per 10 grams at the time of closing stock market hours yesterday.

Talking about Indian stock markets, Rahul Shah, co-head of Research at Equitymaster, in his latest video talks about how one should invest in the current times.

One of the biggest uncertainties in an uncertain world is a huge stock market crash.

Should one make an attempt to predict it or is there any other blueprint that an investor needs to follow?

Rahul discusses these points in the video below. Tune in to find out more:

Top Stocks in Focus Today

HDFC Bank will among the top buzzing stocks today.

The Securities Appellate Tribunal (SAT) has granted relief to HDFC Bank by staying on an order issued by markets regulator, which directed the lender to transfer over Rs 1.6 billion in the matter pertaining to BRH Wealth Kreators' share pledging.

The tribunal directed HDFC Bank to give an undertaking to the markets regulator that it will abide by the result of the appeal and the directions given therein within four weeks from the date of the disposal of the appeal.

Last month, the regulator had imposed a penalty of Rs 10 million on HDFC Bank for invoking securities pledged by BRH Wealth, allegedly in violation of an interim order. Further, the bank was also directed to transfer Rs 1.6 billion, along with an interest of 7% per annum from October 14, 2019.

HDFC Bank had given a loan to BRH Wealth against shares. The broker had given a declaration that it was the absolute owner of the securities and they were not that of its clients.

Bharat Forge share price will also be in focus today. This comes as engineering and technology conglomerate Bharat Forge and global aerospace and technology company Paramount Group have announced a cooperation that will see them join technologies, capabilities and expertise to manufacture armoured vehicles in India.

An agreement to this effect was signed by both companies during the International Defence Expo (IDEX 2021) in Abu Dhabi.

Market participants will also track Reliance Industries (RIL) share price today. The Mukesh Ambani-controlled company which has proposed hiving off its oil to chemicals (O2C) business into an independent subsidiary, said it had received an approval from the markets regulator and stock exchanges to create this subsidiary.

The company now requires the approval of equity shareholders and creditors, regulatory authorities, and the income-tax authority, besides the National Company Law Tribunals (NCLTs) in Mumbai and Ahmedabad.

In a presentation to investors, RIL said that the creation of this subsidiary would facilitate value creation through strategic partnerships and attract dedicated pools of investor capital. The ongoing talks with Aramco for a stake sale in RIL were also mentioned in this presentation.

IPO Buzz: Heranba IPO Sees Good Retail Subscription on Day 1

In news from the IPO space...

The initial public offering (IPO) of agrochemical manufacturer Heranba Industries was subscribed 65% at the time of Indian stock market closing hours yesterday - its first day of bidding.

The Rs 6.3-billion public issue received bids for 3.5 million equity shares against offer size of 7 million shares, the subscription data available on the exchanges showed.

The portion reserved for retail investors was subscribed 1.28 times. The portion set aside for non-institutional investors was subscribed 4%, while qualified institutional buyers have not started bidding for the issue.

The offer size excludes anchor book of over 3 million equity shares. The company mopped up Rs 1.9 billion from anchor investors on February 22, a day before the opening for the issue.

The agrochemical company's IPO includes a fresh issue of Rs 600 million and the remaining is an offer for sale (OFS) by existing investors.

The price band for the issue has been fixed at Rs 626-627 per share.

Heranba Industries is a crop protection chemicals manufacturer, exporter and marketing company. It has over 9,400 dealers/distributors across 16 states and 1 Union Territory in India and exports to over 60 countries across the Middle East, South East Asia and Africa.

How this IPO sails through remains to be seen. Meanwhile, stay tuned for more updates from this space.

Hindalco Alters Dividend Policy; Lays Out Plan to Cut Debt

Hindalco Industries has decided to pay 8-10% dividend from the consolidated free cash flow against its existing policy of paying 10-30% of the standalone net profit.

The above move will lead to higher payout as it will now consider the free cash flow of its US subsidiary Novelis while distributing dividend.

Moreover, the company said dividend will be declared out of the profits of that financial year or previous financial years after providing for past depreciation. This is in contrast to the existing policy which provides for paying dividend only from the existing year's standalone net profit and the retained earnings were to be utilised only in exceptional circumstances.

Before deciding on dividend, the board will consider various internal and external factors including stability of earnings, future capital expenditure, inorganic growth plans and reinvestment opportunities, or any such alternative profit distribution measure and any other contingency plans.

The Aditya Birla Group's metal flagship company also said it expects to generate US$ 1-1.2 billion cash flow per annum post its normal working capital and maintenance Capex and has come out with a capital allocation framework for growth Capex, debt reduction and for shareholders' returns.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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