Windlas Biotech's IPO, Tata Motors' Price Hike, and Buzzing Stocks Today

Fri, 30 Jul Pre-Open

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Indian share markets ended on a positive note yesterday.

Benchmark indices closed higher after three days of selloff as the global mood stabilised post the favourable US Federal Reserve meet outcome.

Besides, reports that the Chinese Securities regulator has stepped-in to assuage investor concerns over the tech crackdown supported sentiment.

At the closing bell yesterday, the BSE Sensex stood higher by 209 points (up 0.4%).

Meanwhile, the NSE Nifty closed higher by 69 points (up 0.4%).

Hindalco and Tata Steel were among the top gainers.

Maruti Suzuki and Power Grid Corp, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 0.4% and 0.9%, respectively.

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

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

At 8:10 am today, the SGX Nifty was trading down by 76 points, or 0.5% lower at 15,764 levels. Indian share markets are headed for a negative opening today following the negative trend on SGX Nifty.

Gold prices for the latest contract on MCX were trading up by 1% at Rs 48,045 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 Tata Motors.

Shares of Tata Motors rose as much as 3.8% on the exchanges yesterday after the company said it is planning to increase prices of its passenger vehicles from next week as it aims offset the steep rise in procurement cost of essential materials such as steel.

The quantum of the price hike was not indicated by the auto-maker.

Tata Motors President Passenger Vehicles Business Unit (PVBU) Shailesh Chandra said,

• We have seen a very steep increase in the prices of steel and precious metals over the last year. The financial impact of the increase in commodity prices is in the range of 8-8.5% of our revenues.

He noted that the company has been able to pass on only a small part of the increase in input costs to the customers so far.

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It has been able to mitigate some of the impact of rising input costs by running various cost reduction initiatives as it wanted to avoid passing on a big quantum of price hike to customers.

Earlier this month, the country's largest carmaker Maruti Suzuki hiked prices of its hatchback Swift and CNG variants of other models by up to Rs 15,000 to counter increase in input costs.

Similarly, Honda has also announced to increase prices of its entire model range in India from August, as it looks to offset the impact increase in commodity prices.

FMCG stocks will also be in focus today.

Early numbers and estimates for the April-June quarter indicate a steady recovery in FMCG players' business.

Despite a severe second wave, India's fast-moving consumer goods (FMCG) sector seems to have emerged as one of the most resilient segments of the economy.

Because of the nationwide lockdowns, FMCG revenues had been severely affected in mid-2020. Sales and profitability of all leading FMCG manufacturers had slipped below 2019 levels in spite of consumers doing panic purchase and storing their pantries.

However, during the second wave, better penetration, supply chain efficiencies, targeted push for relevant products, and a massive digital push by FMCG manufacturers helped contain sales loss of sales.

In the April-June quarter, Hindustan Unilever (HUL) managed to exceed its revenue in the June 2019 quarter, backed by strong volume and sales growth.

It must be noted that last year too, its net sales had remained higher than that level, but it was due to the acquisition of GSK Consumer, which aided the top line.

For another FMCG major ITC's net sales in the latest quarter were 12.5% higher than those in the same quarter of 2019.

This recovery came after a double-digit decline last year.

Top executives of FMCG leaders like HUL and Dabur said their learnings from 2020 helped them prepare better and minimise losses this time.

According to HUL Chairman & MD Sanjiv Mehta, in spite of a more severe second wave, business activities were less impacted due to the government's approach of localized lockdowns.

Balrampur Chini Hits Record High on Share Buyback Plan

Shares of Balrampur Chini Mills moved higher by 11% to hit a record high of Rs 387.1 on the BSE yesterday after the company announced its share buyback plan.

The stock of the sweetener surpassed its previous high of Rs 370, touched on 29 June 2021.

The board of directors of Balrampur Chini Mills is scheduled to meet on Monday, 9 August 2021, to consider buyback of equity shares of the company and matters related/ incidental thereto.

The board will also consider the financial results of the company for the quarter ended 30 June 2021.

As on 30 June 2021, the promoter group held 41.21% stake in Balrampur Chini Mills.

The remaining 58.8% holdings are with the foreign portfolio investors (20.8%), individual shareholders (17.1%) and mutual funds (13.9%), shareholding pattern data shows.

In the past four consecutive calendar years, Balrampur Chini Mills had bought back shares from its shareholders.

In the past six months, the market price of Balrampur Chini Mills has zoomed nearly 120% on improved outlook.

The sugar sector has seen a turnaround from being a cyclical to a structural growth sector backed by government's aggressive ethanol blending programme.

With the massive increase in distillery capacities by sugar companies, ethanol sales are likely to double for most of sugar companies.

Windlas Biotech IPO to Open on 4 August 2021

The initial public offering (IPO) of Windlas Biotech will hit the primary market on 4 August 2021. The price band for the same has been fixed at Rs 448-460 per share with a face value of Rs 5 each.

Dehradun-based Windlas Biotech is one of the top companies in the domestic pharmaceutical formulations contract development and manufacturing organization (CDMO) in India.

Windlas Biotech will raise Rs 1.7 bn through the issuance of fresh equity shares, while promoters and existing shareholders will offload 5.1 m equity shares via an offer for sale (OFS).

Investors participating in the OFS include promoter Vimla Windlass (1.4 m equity shares) and Tano India Private Equity Fund II (4.1 equity shares). Tano India Private Equity Fund will exit the company by selling its entire 22% stake.

Investors can bid for a minimum of 30 equity shares and in multiples of 30 shares thereafter. The issue closes on 6 August for subscription.

50% of the net issue is reserved for qualified institutional buyers (QIBs), whereas 15% stake will be allotted to non-institutional investors (NIIs). Retail investors will have 35% of the issue size ear-marked for them.

The net proceeds from the fresh equity issue will be utilised for purchase of equipment required for capacity expansion of existing facility at Dehradun Plant, repaying of certain borrowings and working capital requirements.

SBI Capital Markets, DAM Capital Advisors and IIFL Securities have been appointed as book running lead managers (BRLMs) of the issue. Link Intime India is the registrar of the issue.

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

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