4 Factors Why Stock Markets Surged, Eased Norms for Startups to Go Public, and Buzzing Stocks Today

Tue, 30 Mar Pre-Open | Monish Vora, TM Team

   Momentum Moves   

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Indian share markets witnessed positive trading activity throughout the day on Friday and ended on a strong note.

After witnessing two consecutive days of sell-off, benchmark indices rebounded sharply with Sensex jumping more than 750 points in intraday trade and Nifty rising above 14,550.

At the closing bell on Friday, the BSE Sensex stood higher by 568 points (up 1.2%).

Meanwhile, the NSE Nifty closed higher by 182 points (up 1.3%).

Bajaj Finserv and Tata Steel were among the top gainers.

UPL and Power Grid, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 1.7% and 1.1%, respectively.

On the sectoral front, gains were largely seen in the metal sector, FMCG sector and telecom sector.

Market participants were tracking shares of JSW Steel and 3M India as they hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading down by 0.1% at Rs 44,625 per 10 grams at the time of closing stock market hours on Friday.

Speaking of the stock markets, India's #1 trader, Vijay Bhambwani, talks about how the Nifty could move this year, in one of his latest videos for Fast Profits Daily.

Tune in here to find out more:

Top Factors Why the Stock Market Were Up on Friday:

Positive Macro Data in the US: Better than expected US GDP data and a decline in the unemployment claims boosted stock market sentiment.

The number of Americans filing new claims for unemployment benefits dropped to a one-year low last week as economic activity rebounds after weather-related disruptions in February.

Gross domestic product increased at a 4.3% annualized rate, the Commerce Department said in its third estimate of fourth-quarter GDP growth.

Positive Global Cues: Major global markets rose on Friday and the positive sentiment spilled to the Indian bourses too.

Asian stocks recovered from a three-month low, as investors focused more on optimism about the global economic recovery than rising tensions between the West and China.

Covid-19 Vaccination Picks Pace: With vaccination picking pace, market sentiment got a boost. Market participants took cues from this development and the indices witnessed buying interest.

Sectoral Gains: Market participants bought shares across the board after the recent correction bought valuations down. Auto, banking, financials, FMCG and IT - all indices witnessed strong gains on Friday.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

Top Stocks in Focus Today

Kalyan Jewellers will be among the top buzzing stocks today as the company made a weak stock market debut last week.

The stock of Kalyan Jewellers got listed at Rs 73.90 on BSE, a 15% discount to its issue price of Rs 87.

The Rs 11.7 billion issue, which was sold between March 16 and 18, was subscribed 2.61 times.

Kalyan Jewellers is among the largest jewellery companies in India. The jeweller is engaged into designing, manufacturing and selling a variety of gold, studded as well as other products. It has 107 showrooms in all across 21 states. Besides, the company operates 30 showrooms in West Asia.

Power Grid Corporation share price will also be in focus as the company said it has acquired Bikaner-II Bhiwadi Transco (BBTL).

"Power Grid Corporation of India, pursuant to its selection as the successful bidder under tariff-based competitive bidding, has on March 25, 2021, acquired BBTL," it said in a regulatory filing.

BBTL is the project Special Purpose Vehicle (SPV) which will establish a transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase-II, on a build, own, operate and maintain (BOOM) basis from the bid process coordinator - PFC Consulting, it added.

Get Details: We are Bullish on These 3 Little-known Stocks

Indian Stock Market Regulator Eases Norms for Startups to Go Public

The Indian stock market regulator has approved several changes to the listing rules on the Innovators Growth Platform, including reducing the time early-stage investors need to hold 25% of pre-issue capital from two years to one, and allowing IPO-bound startups to allocate up to 60% of the issue size to any eligible investor with a lock-in of 30 days on such shares.

Currently, startups going public are barred from making discretionary allotments.

The market regulator also relaxed the threshold trigger for open offers from the existing 25% to 49% for startups, barring situations where there is a change in management control of the target company.

It also eased norms for the delisting of startups. Delisting will be considered successful if the acquirer or promoter shareholding, along with the shares tendered and accepted, reaches 75% of the total issued shares of that class, and at least 50% of the public shareholding is tendered and accepted. Further, the reverse book-building mechanism will not be applicable to startups seeking to go private.

For the computation of offer price, the floor price will be determined in terms of takeover regulations, along with a delisting premium as justified by the acquirer or promoter. The rules for companies seeking to migrate to the main board from the Innovators Growth Platform have also been eased.

Industry experts said the market regulator's move is aimed at encouraging successful Indian startups to list in the domestic markets instead of foreign bourses. Several Indian startups and young companies, including Flipkart, are looking to list abroad. Many other well-known startups such as Zomato, Swiggy, Delhivery, Policybazaar, Freshworks and Nykaa are also said to be eyeing public listing overseas.

The markets regulator realizes that startups are using SPAC (special purpose acquisition company) and shell companies as a way of public liquidity. If that becomes the norm, it is basically an opportunity lost for Indian capital markets and the regulator needs to provide opportunities for Indian investors. This has come at the right time as a lot of startup public market activity is at a very advanced stage.

How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

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

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