Paras Defence IPO - 7 things to know
Paras Defence and Space Technologies IPO will open for subscription on 21st September and close on 23rd September. Here are seven things to know about the Paras Defence IPO.
1) It is engaged in the design, development, production and testing of defence and space engineering products and also solutions. It caters to most of the large defence companies and government sponsored defence research organizations in India.
2) Paras operates across 5 major product lines viz. Defence optics, Defence electronics, Heavy Engineering, Niche technologies and Electromagnetic pulse protection systems. It almost has a monopoly in the space optics field, which is a kind of an entry barrier.
3) Paras is among the defence technology companies to largely benefit from the Make in India campaign which proposes to shift production of most of the regular defence purchases to the domestic manufacturers from a strategic standpoint.
4) The company is profit making and in the year ended Mar-21, Paras reported net profits of Rs.15.79 crore on net sales of Rs.144.61 crore giving a net margin of 10.92%. The company needs to look at improving asset turnover ratios due to front-ending of costs.
5) The IPO will be a combination of a fresh issue of Rs.140.60 crore plus an offer for sale of 17.245 lakh shares. The price band for the stock is yet to be decided. Paras is also planning an anchor placement ahead of the IPO issue.
6) The company proposes to finalize the basis of allotment for the IPO by 28th September and the shares will be listed on the stock exchanges on the 01st October. Promoters are holding 88.16% prior to the IPO and this is likely to get diluted post the issue.
7) The proceeds of the fresh issue will be used for capacity expansion as well as for repaying part of the debt in the books of the company. Anand Rathi is the lead manager to the issue while Link Intime will be the registrar to the issue.
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How to trade the USDINR when the rupee is at Rs.73.448/$?
Currency traders are likely to be a harried lot in the last month or so. The rupee had weakened to about Rs.74.60/$ just a month ago. However, there was a rapid bout of strengthening of the rupee all the way to Rs.72.90/$ before the rupee has once gain weakened to Rs.73.448 as of 15-Sep. The question is; what should currency futures traders do in this kind of volatile currency situation.
Let us first understand the story behind this volatility. Towards the middle of August, it was becoming increasingly clear that the US may consider taper later this year but rate hikes were ruled out. This led to a fall in US bond yields while the yields in India remained elevated at around 6.2% against 1.27% for the US. This wide rate gap was an incentive for debt flows into India, which strengthened the INR.
However, the Indian economy cannot support a very strong rupee as the fiscal deficit is still high at around 6.8% of GDP and the government borrowings are at an all-time high level. The RBI also would not be too keen to let the rupee strengthen as it would hit the competitiveness of Indian exports.
How to trade this rupee story?
For now it looks like a broadly range-bound trade. The INR could be rangebound for now in the range of Rs.72.80/$ on the stronger side and around 74.20/$ on the weaker side. Around the levels of Rs.74/$, it would be ripe to sell the USDINR as the huge rate differential between Indian benchmark bonds and US benchmark bonds would strengthen the rupee with heavy debt market flows.
However, at below Rs.72.90, it would be a good scenario to go long on the USDINR since the steep fiscal deficit and high borrowing pressure of the government would be key factors weakening the rupee. It is the time for a range-bound trade on the rupee. Of course, since there are multiple factors impacting the rupee/dollar equation, it would be advisable to trade with a stop loss.
Shree Cements Plans Mega Capacity Expansion
Shree Cements plans to invest a sum of Rs.4,750 crore on expanding its capacity across various products as well as in setting up a captive solar plant. Out of the total outlay of Rs.4,750 crore, a sum of Rs.3,500 crore will go towards enhancing cement capacity, Rs.500 crore towards setting up a state-of-the-art solar power and Rs.700 crore towards its clinker manufacturing capacity.
The integrated cement plant will be set up in Nawalgarh in Rajasthan. The Rs.3,500 crore allocation will be towards cement capacity of 3.50 million tonnes per annum (MTPA). This is higher than its current average capital cost. Shree Cements currently has total cement capacity of 43.40 MTPA and it operates at 67% capacity utilization.
Shree Cements is the second largest cement player in India after Ultratech. Shree Cements had reported 90% yoy growth in profits in the Jun-21 quarter but the profits had been lower on a sequential basis. That had impacted the sentiments around the stock, but the latest expansion plan has come as a positive for the stock.
The plant will also have a clinker capacity of 3.80 MTPA. The plant is expected to be ready for operation by the end of fiscal year 2023-24. In addition, to tap the huge demand-supply gap in East India, Shree Cements East Private Limited will set up a clinker grinding unit in the Purulia district in West Bengal.
The solar power plant will have a capacity of 106 MW and will supply power to the various plants of Shree Cements. Most cement stocks have rallied sharply as infrastructure demand for cement has been robust and housing demand is expected to pick up in next few quarters. After a very long time, the bargaining power is back with cement manufacturers and they have been able to pass on the spike in input costs to the end customer. That is evident from the recent spike in cement prices.
Also Read: Are Cement Prices Improving?
What You Need to Know About the Natural Gas Price Rally
The US markets have seen a phenomenal rally in natural gas prices. Just to get a heads up, the price of natural gas on the bourses has moved up from $3/NTG to $5.49/NTG since the beginning of May 2021. In other words, gas prices have rallied by over 80% in the last 4 months. Here is a quick look at the reasons for this really and what it holds for the future of natural gas trading.
• The biggest reason for the massive rally was the short squeeze in natural gas in the global market. For example, the CFTC report on open positions had indicated heavy shorts built up in natural gas contracts. This was on expectations of a sharp fall in the price of natural gas.
• However, what transpired was exactly the opposite. An unusually hot summer in the US led to a surge in demand for natural gas for cooling support. The shorts soon found that there was nobody left to sell and the prices were moving higher. This led to a rush to cover shorts and the short squeeze triggered the sharp spike in natural gas prices.
• If hot weather was a major factor, the other key factor was Hurricane Ida which resulted in a spurt in demand for natural gas. However, the short covering rally may have played out if you consider the bounce. Also, for the rally to continue, this year’s winter must be exceptionally cold so natural gas demand remains buoyant for heating needs.
• Many of the traders who shorted natural gas in the range of $3.20 to $3.50 found themselves running out of margin power by the time natural gas crossed $4.00. That resulted in the massive squeeze.
• The bottom line is that natural gas could become a lot more expensive before it sees a fall. The best approach would be to wait for the markets to get overbought and then look to sell Natural Gas futures in the market. The Indian natural gas contracts more or less mirrors the global price.
Sansera Engineering IPO Day-3 Subscription
The Rs.1,282.98 crore IPO of Sansera Engineering, consisting entirely of an offer for sale (OFS), had been fully subscribed on Day-2 itself. As per the combined bid details put out by the BSE at the close of Day-3 of the issue, Sansera Engineering IPO was subscribed 11.47X overall, with bulk of the demand coming from the QIB segment.
As of close of 16th September, out of the 121.09 lakh shares on offer in the IPO, Sansera Engineering saw bids for 1,388.39 lakh shares. This implies an overall subscription of 11.47X. The granular break-up of subscriptions were tilted in favour of QIB investors followed by HNI investors and retail investors.
Sansera Engineering IPO Subscription Status - Day 3
|Qualified Institutional (QIB)||26.47 Times|
|Non-Institutional (NII)||11.37 Times|
|Retail Individual||3.15 Times|
The QIB portion was subscribed 26.47 times at the close of Day-3. On 13 September, Sansera Engineering did an anchor placement of Rs.382.05 crore to QIB investors including a number of marquee names like Government of Singapore, Monetary Authority of Singapore, Nomura, Abu Dhabi Investment Authority, Axis MF, ICICI Prudential MF, SBI Life, Max India Life, Kuber India Fund etc. The QIB portion (net of anchor allocation) has a quota of 34.23 lakh shares of which it has got bids for 906.15 lakh shares, implying a subscription ratio of 26.47X for QIBs at the close of Day-3. Most QIB bids came in on the last day.
The HNI portion got subscribed 11.37X (getting applications for 291.95 lakh shares against the quota of 25.68 lakh shares). Bulk of the funded applications and corporate applications, came in on the last day of the issue on Thursday.
The retail portion was subscribed 3.15X at the end of Day-3, showing healthy retail appetite. For retail investors; out of the 59.91 lakh shares on offer, valid bids were received for 188.55 lakh shares, of which bids for 146.90 lakh shares were at the cut-off price. The IPO is priced in the band of (Rs.734-Rs744) and the IPO has closed for subscription on 16th September.
5 Stocks to Buy Today: September 16, 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
Cyient Stock Details for Today:
- Current Market Price: Rs.1,111
- Stop Loss: Rs.1,060
- Target 1: Rs. 1,200
- Holding Period: 1 week
5paisa Recommendation: Our technical analysts observe a breakout in this stock and our experts expect the uptrend to continue today as well..
2. Bharti Airtel (BHARTIARTL)
Bharti Airtel Stock Details for Today:
- Current Market Price: Rs. 726
- Stop Loss: Rs. 711
- Target 1: Rs. 740
- Target 2: Rs. 756
- Holding Period: 1 Week
5paisa Recommendation: Our technical analysts observe that further buying in this stock to continue today as well.
3. Easy Trip (EASEMYTRIP)
Easy Trip Stock Details for Today:
- Current Market Price: Rs. 542
- Stop Loss: Rs. 531
- Target 1: Rs. 565
- Holding Period: 1 Week
5paisa Recommendation: Our technical analysts observe that uptrend in the stock is likely to continue.
4. Supreme Industries (SUPREMEIND)
Supreme Industries Stock Details for Today:
- Current Market Price: Rs. 2,259
- Stop Loss: Rs. 2,210
- Target 1: Rs. 2,370
- Holding Period: 1 Week
5paisa Recommendation: Strong volumes indicate this is likely to be a coveted stock, thus making it to the top stocks to buy list.
5. Birlasoft Ltd (BSOFT)
Birlasoft Stock Details for Today:
- Current Market Price: Rs. 426
- Stop Loss: Rs. 415
- Target 1: Rs. 450
- Holding Period: 1 Week
5paisa Recommendation: Our technical analysts observe the end of sideway trend. Thus making stock as one of our strongest recommended Stocks to Buy Today.
Share Market Today
SGX Nifty indicates positive opening for Indian markets. SGX Nifty is at 17,521.20 levels, higher 134.25 points. (Updated at 7:55 AM).
US Market: US markets ended with gains as energy stocks lead the gainers with oil prices at 3-month highs.
Bond yields trade near 1.29% even as US$ sees initial weakness being bought into the US sees high. Higher tax proposal gets go-ahead from White House which could see higher volatility in the near future.
Asian Market: Asian markets opened muted with the Japanese 'Nikkei' trading almost flat as markets consolidated after a superb last fortnight.
Higher ETF flows have been the elixir for Asian markets with money seeing a move from developed to emerging markets.
Chinese stocks have lagged behind the Asian peers as Government policy on the internet/fintech sees foreign funds turn sellers.