- SBI and Union Bank are said to be exposed to $1.8 billion PNB fraud case: Bloomberg.
- IDBI Bank sells entire 30 percent stake in NSDL e-Governance infrastructure.
- India Grid Trust acquired three power transmission assets for Rs 1,410 crore.
- IPO watch: Aster DM Healthcare IPO subscribed 1.2 times.
Indian equity benchmarks closed higher for the second time this week, steadying after a decline that followed a 5.6 percent gain in January and a 28 percent advance in 2017.
The S&P BSE Sensex Index closed 0.4 percent higher at 34,297, while the NSE Nifty 50 Index also closed 0.4 percent higher at 10,545.
Japanese stocks extended a rally in global equities and the yen retreated from a 15-month high, with trading muted due to holiday closures across Asia.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 10,586.50 as of 6:50 a.m.
- UCAS appointed Infosys as its core technology partner up to 2021.
- HDFC allots 2.49 crore shares to investors at Rs 1,726.05/share on a preferential basis.
- SBI and Union Bank are said to be exposed to $1.8 billion PNB fraud case: Bloomberg.
- Allahabad Bank’s exposure at about Rs 4,000 crore in PNB fraud case: Bloomberg.
- Union Bank’s exposure at about Rs 1,000-2,000 crore in PNB fraud case: Bloomberg.
- Axis Bank’s exposure at about Rs 2,000-3,000 crore in the PNB fraud case: Bloomberg.
- IDBI Bank sells entire 30 percent stake in NSDL e-Governance infrastructure.
- Indoco Remedies gets European GMP certification for manufacturing facility in Goa.
- Prakash Industries to raise Rs 208 crore from promoters by issuing 1 crore convertible warrants.
- India Grid Trust acquired three power transmission assets for Rs 1,410 crore.
- 8K miles launched proprietary Blockchain platform 8K Health Edge.
- Mahindra and Mahindra to invest Rs 176 crore in Zoomcar India
- Idea Cellular board meeting on Feb. 21, 2018 to approve QIP issue price.
IPO Watch
- Aster DM Healthcare IPO closes. The issue was subscribed 1.2 times.
F&O Setup
- Nifty February futures traded at 10,551, a premium of 5.7 points.
- February series: Nifty open interest down 2 percent, Bank Nifty OI unchanged.
- India VIX ended at 16.3, down 5 percent.
- Maximum open interest for February series at 11,100 call strike (open interest at 52.7 lakh, down 2.2 percent)
- Maximum OI for February series at 10,500 Put (open interest at 64 lakh, up 1 percent)
F&O Ban
- In ban: Balrampur Chini, Dish TV, GMR Infra, HDIL, Jain Irrigation, JP Associates, Oriental Bank
- New in ban: Jain Irrigation
Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.
Active Stock Futures
Bulk Deals
- City Union Bank: Lavender Investments sold 60 lakh shares or 0.9 percent equity at Rs 166 each.
Praxis Home Retail
- Aadi Financial Advisors LLP acquired 6.26 lakh shares at Rs 161.81 each.
- Pensionskasse Des Bundes Publica sold 1.63 lakh shares at Rs 167.82 each.
Brokerage Radar
Macquarie on Punjab National Bank
- Maintained ‘Underperform’ with price target of Rs 128.
- Yet another example of poor risk management practices at PSU banks.
- Funded exposure of Rs 1,700 crore and non-funded exposure of Rs 11,000 crore.
- If held liable, this would translate to 27 percent of net worth and 43 percent of market cap.
- If held liable, would wipe out profits made between April 2012 and March 2017.
- Frauds a periodic occurrence because of poor systems, checks & balances.
JPMorgan on Punjab National Bank
- Maintained ‘Neutral’ with price target of Rs 195.
- Fraud detected; Large potential writedown.
- Expect this event to remain an overhang on stock price in the near term.
- May be too late to sell but recommend avoiding entering the stock.
- If liability of Rs 11,300 crore booked, then 15 percent hit to the next fiscal’s estimated book per share.
- May also lead to slower revenue growth along with higher funding costs.
- Total liability nearly represents entire deposit accretion of December quarter.
- Possible incremental recap from the government.
- PNB could divest its 33 percent stake in PNB Housing Finance.
Morgan Stanley on Zee Entertainment
- Maintained ‘Overweight’ with price target of Rs 610.
- Zee launched its new OTT platform - Zee5.
- Some content available for free.
- For premium content there will be monthly subscription.
- Expect aggressive advertising of this platform over the next several months.
HSBC on SKF India
- Maintained ‘Buy’; raised price target to Rs 2,300 from Rs 2,000.
- December quarter’s earnings strong.
- Automotive business continues to do well.
- Slower industrial sales negatively impacted earnings.
- New initiatives and new product lines to support market share driven growth.
- New distribution centre to allow the company to gain market share for industrial products.
Deutsche Bank on India Equity Strategy
- Following the sell-off we see attractive risk reward for rural reflation beneficiaries and high growth, high CASA banks.
- Rural Reflation thrust to gain momentum.
- RBI’s latest guidelines turn risk-reward firmly in favor of retail-oriented lenders.
- Strong liabilities franchise emerge as a key differentiator in tightening liquidity scenario.
- Preferred stocks: HUL, Dabur, M&M, Dalmia Bharat and Shree Cement.
- Preferred banks: HDFC Bank, IndusInd Bank and Kotak Mahindra Bank.
- Preferred NBFCs: Shriram Transport Finance, HDFC and M&M Financial Services.
Motilal Oswal on Zee Entertainment
- Maintained ‘Buy’ with price target of Rs 705.
- Zee launches digital app – Zee5.
- Focusing on original content to benefit from shift toward OTT.
- Offering original content at initial price of Rs 99 per month.
- Incremental operating cost toward Zee5 could be Rs 50-70 crore.
- Expect 80 – 100 basis point impact on the operating margin.
- Expect 24 percent compounded growth rate in earnings per share over the financial years through March 2020, with RoIC of over 30 percent.
Credit Suisse on Apollo Hospitals
- Upgraded to ‘Outperform’ from ‘Neutral’; raised price target to Rs 1,450 from Rs 1,075.
- Margins bottoming out; strong growth ahead.
- Margins for mature hospitals stabilising now.
- Strong 20 percent compounded growth rate in operating income over the financial years through March 2020.
- New hospitals show improvement in utilisation and operating income.
- Pharmacy margins better than expected.
- Apollo Hospital turnaround pushed out to the financial years ending March 2020.