Lower Oxygen Supplies to Affect 5 Sectors, Tata Steel's Blockchain Transaction, and Buzzing Stocks Today

Fri, 23 Apr Pre-Open | Monish Vora, TM Team

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Indian share markets ended on a positive note yesterday.

At the closing bell yesterday, the BSE Sensex stood higher by 375 points (up 0.8%).

Meanwhile, the NSE Nifty closed higher by 110 points (up 0.8%).

JSW Steel and ICICI Bank were among the top gainers.

Titan Company and Shree Cements, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 0.3% and 0.6%, respectively.

Sectoral indices ended on a mixed note with stocks in the metal sector and finance sector witnessing most of the buying interest.

FMCG stocks, on the other hand, witnessed selling pressure.

Shares of Navin Fluorine and Balrampur Chini hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading down by 0.3% today at Rs 48,100 per 10 grams at the time of closing stock market hours yesterday.

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Top Stocks in Focus Today

Among the buzzing stocks today will be KEC International.

Global infrastructure major KEC International announced it has secured new orders worth Rs 12.5 billion across various business segments including Power Transmission & Distribution (T&D), Railways, Civil Construction and Cables.

The company said it has secured orders for T&D projects worth Rs 6.3 billion in India, SAARC, Middle East, and the Americas. In the railways business, it said it has bagged orders worth Rs 4.5 billion while in the civil business it has secured orders worth Rs 1.1 billion for infrastructure work. New orders awarded in the cables business stood at Rs 630 million.

Hero MotoCorp share price will also be in focus today as the company has halted manufacturing at all its plants in light of the ongoing surge in spread of Covid-19 across the country. The shutdown, which is temporary and includes the global parts centre (GPC), is a first by a two-wheeler maker in this financial year.

The Delhi-based maker of Splendor stated that it will utilize these shut-down days to carry out necessary maintenance work in the manufacturing plants. Each plant and GPC will remain shut for four days, in a staggered manner between April 22 - May 1 basis the local scenario.

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Lower Oxygen Supplies to Temporarily Impact Five Sectors

With demand for medical oxygen soaring, the central government has barred industrial use (except by nine sectors) from April 22, 2021.

Demand for medical oxygen is estimated to have rocketed five-fold in the second week of April versus pre-pandemic levels as Covid-19 infections took off, Crisil said on Wednesday.

The consequent higher supply of medical oxygen will save lives, but will have a bearing on some sectors, the rating agency said

The disruption in the supply of oxygen for industrial use would temporarily impact the revenues of small and mid-sized companies into metal fabrication, automotive components, shipbreaking, paper, and engineering.

These typically do not have captive oxygen plants and source their requirement through merchant suppliers for operations such as welding, cutting, cleaning and chemical processes.

Setting up an air-separation plant or importing oxygen requires significant lead time and involves relatively prohibitive cost, so is not a viable option. That leaves them more vulnerable compared with larger peers.

Oxygen is consumed by the industry in two ways - onsite, and merchant sales. Onsite is through captive plants for process-driven industries (including the nine sectors exempted by the government), which account for 75-80% of oxygen manufactured in India.

The balance 20-25% is supplied through merchant sales (called liquid oxygen) through cryogenic tanks and cylinders. The healthcare sector consumes 10% of merchant sales, and others the rest.

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

Tata Steel and HSBC Execute Blockchain-Enabled Paperless Transaction

Moving on to news from the steel sector...

Tata Steel, along with HSBC, has executed a blockchain-enabled paperless trade transaction.

According to the company, this is a global first for the steel industry.

The live financial transaction involved the export of steel by Tata Steel to Universal Tube & Plastic Industries, UAE, a press release said on Wednesday.

The end-to-end paperless transaction was made possible by a unique collaboration pivoted by Tata Steel across the spectrum over the Contour and essDOCS platforms. The letter of credit was issued by HSBC UAE for Universal Tube & Plastic Industries, UAE (importer), with HSBC India as the advising and negotiating bank for Tata Steel, India (exporter).

This transaction validates the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation.

Tata Steel has also signalled its intent to explore similar opportunities in other geographies as well.

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