Bharti Airtel Rights Issue to Open on 05th October

Bharti Airtel Rights Issue
by 5paisa Research Team 24/09/2021

Bharti airtel has just announced that its proposed Rs.21,000 crore rights issue will be open from 05-Oct to 21-Oct. The rights shares are being issued in the ratio of 1 right share for every 14 shared held i.e. in the ratio of 1:14. The record date for the rights eligibility determination has been fixed as 28-Sep. That means, to be eligible for the rights, investors must have purchased the shares latest by 24-Sep as the stock will go ex-rights from 27-Sep.

The rights shares price has been fixed at Rs.535 per share, which represents a 27.98% discount to the closing price of 24-Sep at Rs.742.90. Normally, companies tend to price the rights at a steep discount to incentivize the existing shareholders to apply for the rights issue. This is the second largest rights issue by an Indian company after the Rs.53,000 crore rights by Reliance Industries last year. In the Bharti rights, 25% is payable on application.

The rights entitlements (RE) will get credited to the demat accounts of eligible shareholders by 04-Oct so that the RE is available to the shareholders at the time of the rights opening. Investors have two choices. They can either use the REs to apply for the rights shares in the proportion eligible. Alternatively, they can just renounce the rights by selling the RE in the market as it will be traded. The RE is expected to list at a premium of 50-60%.

Check: Bharti Airtel Rights Issue - How to Apply for Rights Issue Online

While 25% of the subscription amount will be payable by the rights subscribers on application, the balance will have to be paid in two tranches, which will be intimated to the shareholders separately. Rights represent an expansion of capital base so it is EPS dilutive. Hence the shareholders must either exercise the rights or renounce the rights by selling the RE. Letting the rights expire results in loss for the shareholders.

The rights entitlements will be traded on the stock exchange with an RE suffix and will be permitted to trade between 05-Oct and 18-Oct, during which period, traders choose to exercise or renounce the RE.

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Weekly Stock Market Wrap Up - 20 - 24 September

Weekly Stock Market Outlook
by 5paisa Research Team 25/09/2021

NIFTY 50

Nifty closed on a positive note at 0.17% near 17853 levels on friday. The market breath was bearish with 20 advances against 30 declines.  FMCG, MEDIA, METAL, PHARMA  index ended the session on negative note while Nifty bank, AUTO, Financial services, IT, Realty ended the session in green zone.  

NIFTY BANK 

Niftybank closed on a positive note near 37830.30 levels.  ICICIBANK, hdfcbank, Kotak bank were top gainers while AUbank, IDFCFIRSTB, Bandhanbnk were top losers.
 
WEEKLY TOP3 GAINERS

SCRIP

LTP

%CHANGE

ZEEL

318.90

+24.84

BAJAJFINSV

18526

+10.01

HCLTECH

1358.20

+7.51

 

WEEKLY TOP 3 LOSERS 

 

SCRIP

LTP

%CHANGE

TATASTEEL

1272.10

-8.21

BPCL

414.80

-4.92

JSWSTEEL

659.15

-3.39

 

Weekly Chart- Nifty50

Nifty 25sept

 

Prices have continued to make higher highs higher lows formation from the last eight weeks and formed a bullish candle on the weekly chart for a second consecutive week. As long as we do not see a decisive close below the prior bars low the trend remains positive. Momentum indicators like RSI and MACD to stay positive and market breadth to improve, further strengthening a short-term bullish outlook.

Nifty has shifted its support zone to 17250, so any dip near mentioned support zone will be again fresh buying opportunity with keeping stop out level below 17250 zone & if said levels are held we may see the index march towards 18k mark, resistance is still placed around 18,000 zone where traders can lock some of their long gains.

Nifty find support near 17250 while 18000 will act as a psychological resistance.

WEEKLY CHART- BankNifty

Bank nifty

20-day period Moving Average is acting as a brilliant support line and it has provided support at regular intervals. This suggest that one should be in the direction of the ongoing trend as far as this line is protected and any pullback towards the same should be utilized as buying opportunity.

Banknifty support is placed near 36200 while on higher side 38200 will act as an immediate resistance.


CALL FOR THE WEEK:

 

Westlife

CALL : BUY WESTLIFE ABOVE 577 SL 555 TGT 610

Description:

WESTLIFE has been moving higher recently and intact in strong uptrend. 

On the daily chart, in the previous session the stock formed a bullish candle. We can see rounding bottom pattern has formed. A close above 577 will confirm breakout of rounding bottom pattern. The stock is trading above the ichimoku cloud which indicates that the short term trend is bullish.

We have applied parabolic SAR which used to determine the price direction as well as draw attention to when the price direction is changing. A series of dots placed below the price which is deemed to be a bullish signal. Closest support is placed at 555.

In short, trend for this stock is positive. A break above 575 can lift price higher towards 610-615 as long as 555 holds on the upside.

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Invesco wants EGM to Replace Punit Goenka from the Post of MD & CEO

26/09/2021

The Zee Entertainment story appeared to have a happy ending last week after the merger announcement with Sony Pictures. The merger will give the combine a 27% market share of the Indian entertainment and sports market with a total of 75 plus channels.

However, the rift between the current management and its largest shareholder, Invesco, is far from over. That is, if you go by the latest letter written by Invesco to Zee.

The letter has called for an urgent EGM (extraordinary general meeting) of shareholders to decide on the removal of Punit Goenka from the post of MD and CEO of Zee. Invesco wants the EGM to be held before the conclusion of the Zee-Sony merger.

According to Invesco, the decision on an important aspect like merger should have been taken ahead of the merger announcement, which was not done.

In fact, Invesco has specifically pointed to the merger as a case of poor corporate governance. Invesco expected to be taken into confidence before announcing the merger. It felt structural management changes should have preceded the merger announcement.

When Invesco first wrote the letter to Zee Entertainment on 11th September, it had called for removal of non-independent directors and inducting 6 directors recommended by Invesco.

In the merged entity, Sony nominates majority of directors. For Invesco, the best way to prevent this happening is to insist on the EGM to vote on the proposal and the constitution of the board. Then Invesco wants the reconstituted board to consider the merger afresh.

Invesco had called for the removal of Punit Goenka and 3 other directors from the board. Invesco was of the view that with just 3.44% stake in the combined entity, the former promoter family was exercising influence disproportionate to the quantum of holdings.

Post-merger, Subhash Chandra's stake in the combine goes up to 4%, thanks to 2% non-compete payment to Zee promoters. The promoter family also has the leeway to enhance this stake from 4% to 20%. That is precisely what Invesco wants to avoid.

Also Read:

Subhash Chandra Takes Up a Good Deal on his Zee Stake

What does the Zee merger with Sony mean

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SEBI to Introduce Swing Pricing Mechanism for Debt Funds

26/09/2021

In a move that was long awaited, SEBI rolled out swing pricing in the case of debt funds. The detailed process flow would be finalized by AMFI in consultation with the various asset management companies and placed for approval by SEBI. To understand the swing price mechanism, it is essential to understand how volatility will impact the NAVs of debt mutual funds and how it puts small retail investors at a disadvantage.

The new swing pricing framework will be officially effective from March 2022. To begin with, the facility of swing pricing would only be allowed in the event of large redemptions. In such cases, since the redemption is done at the previous day’s price the HNIs try and exit at an attractive NAV. This puts an additional burden on the existing unit holders as, quite often, the fund may have to sell less-liquid bonds at sub-market prices.

The whole purpose of Swing Pricing is to ensure that long term investors are not adversely impacted during big ticket redemptions. Normally, long term investment is recommended as the ideal strategy to investors in equity and debt funds. However, it has been observed that in the event of heavy redemptions the long term investors are the worst hit. Swing pricing will overcome this issue, but how will swing pricing work?

Here is how swing pricing works. For example, on the day of huge redemptions, some HNI investors may try and exit at the previous day's NAV. In the swing pricing mechanism, the exit NAV for the selling investor will be adjusted lower to reflect this loss so that the long term investors are not penalized. The idea is to avoid additional erosion for existing investors. If there is a huge cost in terms of liquidity, then outgoing investors bear the cost.

Swing pricing formula will only be applicable in the case of market dislocation. To begin with, the swing pricing mechanism will be introduced for all debt funds except money market funds, gilt funds and 10-year government security funds. SEBI will decide on what amounts to market dislocation while the AMFI will set the limits for triggering swing pricing.

Also Read:- 

SEBI Announces Optional T+1 Settlement From 01-January

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Aditya Birla Sun Life AMC IPO : 7 Things to Know About

Aditya Birla Sun Life AMC IPO : 7 Things to Know About
IPO
by 5paisa Research Team 27/09/2021

The Aditya Birla Sun Life AMC IPO opens on 29th September and closes on 01st October and will be an offer for sale of Rs.2,768.26 crore in the price band of Rs.695 to Rs.712. Since, there is no fresh issue,  there will be no fresh funds coming into the company.

1)  Out of the total IPO size of 388.80 lakh shares, Aditya Birla Capital will offer 28.51 lakh shares while Sun Life UK will offer 360.29 lakh shares. As a result, post the IPO, the holding of Aditya Birla Capital will be 50.01% while Sun Life holding 36.49%. The balance  13.50 lakh shares will be held by the public.

2)  Aditya Birla Sun Life AMC is the fourth largest mutual fund in India in terms of AUM (Rs.2.76 trillion) and the largest non-bank sponsored AMC in terms of AUM size. Its average AUM has grown 14.55% CAGR over the last five years.

3)  Aditya Birla Sun Life AMC operates through a network of 66,000 KYD-compliant mutual fund distributors and 240 national level distributors. The fund has an institutional AUM base of more than 50%, largely into debt and liquid schemes.

4)  The fund offers a wide bouquet of 135 mutual fund schemes including 93 debt schemes, 35 equity schemes, 2 liquid schemes and 5 ETFs. It also has a strong presence in hybrids and passive funds, apart from Fund-of-Funds.

5)  Net profit margins have expanded from 31.75% to 43.64% over the last two years on better cost management and lower asset impairment provisioning. However, top line has come under pressure due to SEBI insistence on lower expense ratios.

6)  The fund will have a post-listing market cap of Rs.20,505 crore at the upper end of the price band of (Rs.695-Rs.712). This is at par with the valuation at which AMC deals have been done in the past.

7)  Aditya Birla Sun Life AMC will be the fourth asset management company to list on the bourses after HDFC AMC, Nippon AMC and UTI Mutual Fund. The broad gains should come from the big trend toward financialization of savings.

Also Read:

Upcoming IPOs in 2021

Upcoming IPOs in September 2021

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5 Stocks to Buy Today: September 27, 2021

5 Stocks to Buy
by 5paisa Research Team 27/09/2021

Every morning our analysts scan through the markets universe and chose the best momentum stocks to buy today. The stocks are recommended from a wider list of momentum stocks and only the best ones make it to the top 5 list. We also update on the performance of earlier recommendation every morning to help you with your trading journey. Read on to know the momentum stocks to buy today. The average holding period could be between 7-10 days on average.

List of 5 Stocks to Buy Today

1. KPIT Technologies Ltd (KPITTECH)

KPITTECH Stock Details for Today

- Current Market Price: Rs.369

- Stop Loss: Rs.360

- Target 1: Rs.379

- Target 2: Rs.394

- Holding Period: 1 week

5paisa Recommendation: Our technical analysts analysed positive chart structure in KPITTECH, thus making this stock as one of the best stocks to buy today.

 

2. Cera Sanitaryware Ltd (CERA)

Cera Sanitaryware Ltd Stock Details for Today: 

- Current Market Price: Rs. 4,990

- Stop Loss: Rs. 4,865

- Target 1: Rs. 5,100

- Target 2: Rs. 5,276

- Holding Period: 1 week

5paisa Recommendation: Our technical analysts observed breakout on chart, thus recommending this stock as the best stock to buy today. 

 

3. Gujarat Narmada Valley Fertlzrs&Chms Ltd (GNFC)

Gujarat Narmada Valley Fertlzrs&Chms Ltd Stock Details for Today: 

- Current Market Price: Rs. 405

- Stop Loss: Rs. 392

- Target 1: Rs.419

- Target 2: Rs. 433

- Holding Period: 1 week

5paisa Recommendation: Our technical experts expects strong volume in this GNFC and recommends buying this stock.

 

4. Eicher Motors Ltd (EICHERMOT)

Eicher Motors Ltd Stock Details for Today: 

- Current Market Price: Rs. 2,931

- Stop Loss: Rs. 2,868

- Target 1: Rs. 3,000

- Target 2: Rs. 3,110

- Holding Period: 1 week

5paisa Recommendation: Further buying expected in this stock and thus making this stock as one of the best stocks to buy today.

 

5. Acrysil Ltd (ACRYSIL)

Acrysil Ltd Stock Details for Today: 

- Current Market Price: Rs. 803

- Stop Loss: Rs. 782

- Target 1: Rs. 830

- Target 1: Rs. 867

- Holding Period: 1 week

5paisa Recommendation: Our technical experts expects a positive momentum in this stock.

 

Share Market Today

SGX NIFTY: 

SGX Nifty indicates positive opening for Indian markets. SGX Nifty is at 18,012.50 levels, higher 163.70 points. (Updated at 7:40 AM).

International Markets:

US Market:

US markets ended flat on Friday as markets consolidate after the Federal Reserve outlook on rates and tapering of bond buying.

Bond yields closed at almost 3-month highs hitting 1.45% while the US$ index also gained and closed at 93.24, with oil prices hitting 2-year highs.

 

Asian Market:

Asian markets opened in the green with the Japanese 'Nikkei' trading up nearly 100 points as rising in oil and bond yields sees traction in most Japanese exporters.

Chinese action on cryptocurrencies will see more speculation even as most fintech players turn to other Asian markets.

The Chinese stocks index has corrected over 15% this year as fear of Government impositions sees huge outflow of foreign investors.

 

Disclaimer: The above report is compiled from information available on the public platforms.