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Reliance stock soars after unveiling plans to rejig gasification assets

by 5paisa Research Team 25/11/2021

Shares of Reliance Industries Ltd (RIL), the country's biggest company by market value, gained as much as 6.1% on Thursday after its board approved a scheme to consolidate its gasification assets into a separate unit.

RIL, led by billionaire Mukesh Ambani, is seeking approval from the capital markets regulator, creditors as well as shareholders for the restructuring and aims to conclude the exercise before the end of the current fiscal year in March 2022.

What led RIL to take up such a restructuring process?

RIL said the repurposing of gasification assets will help the oil-to-telecom behemoth use syngas as a reliable source of feedstock to produce chemicals to meet the growing domestic demand.

This, the company said, will result in an “attractive” business opportunity. Further, as the hydrogen economy expands, RIL will be well-positioned to be the first mover to establish a hydrogen ecosystem, the company said.

Syngas, also known as synthesis gas, is a type of gas mixture primarily comprising hydrogen, carbon monoxide and carbon dioxide. The outbreak of COVID-19 pandemic, which halted manufacturing activities of end-use industries such as chemical, oil, and construction, had an impact on the demand for syngas.

“Syngas as a fuel ensures reliability of supply and helps reduce volatility in energy costs. Syngas is also used to produce hydrogen for consumption in the Jamnagar refinery,” it said. Reliance operates the world’s largest single-location oil refinery at Jamnagar in Gujarat.

RIL’s plan to restructure the gasification business is perhaps meant to generate uninterrupted supply of in-house syngas, which reduces transportation costs and improves stability for end-use of manufacturing chemicals.

As per Allied Market Research, a market research firm based in Pune, the worldwide syngas market size is projected to touch $66.5 billion by 2027. This is up from $43.6 billion in 2019, as per the market research firm.

How will the scheme benefit RIL?

RIL said it will enable the company to unlock value of syngas with a collaborative and asset-light approach that will involve inducting external investors in the gasifier subsidiary, the same way it did with its digital business when it raised upwards of Rs 1.5 trillion ($20.6 billion) in 2020 when most companies were struggling to stay afloat.

RIL also aims to capture value by upgrading through strategic partnerships for its chemicals business in different chemical streams.

What has the board approved?

The RIL board has approved the scheme to transfer the gasification undertaking as a going concern on slump sale basis for a lump sum consideration equal to the carrying value as on March 31, 2022.

How did the stock market react?

RIL shares advanced as much as 6.1% in mid-day trade with strong volumes. More than 10.2 million shares exchanged hands so far in the cash segment on the BSE and tge NSE combined, up 40% compared to its one-month average daily volume of 6.1 million shares on both the exchanges.

The company now commands a market capitalization of over Rs 15.82 trillion. In the past 52 weeks, the stock has touched a high of Rs 2,750 and a low of Rs 1,830 apiece.

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Superstar stocks for tomorrow!

Superstar stocks for tomorrow!
by 5paisa Research Team 25/11/2021

Looking for stocks that could deliver good returns till tomorrow, here are the superstar stocks for tomorrow selected on a three-factor model.

Many of the time market participants see a stock opening with a gap-up and wish they should have bought this superstar stock a day before to take advantage of the gap-up move. To fulfil this wish, we have come out with a unique system, which would help us to get the list of candidates that can be probable superstar stocks for tomorrow.

The superstock stocks for tomorrow selected are based on a three-factor prudent model. The first important factor for this model is price, the second key factor is the pattern, and last but not least is the combination of momentum with volume. If a stock passes all these filters it would flash in our system and as a result, it will help traders to spot the superstar stocks for tomorrow at the right time!

Here are the superstar stocks for tomorrow.

Century Textiles: The stock rose about 5.89% on Thursday. The stock made a double bottom before bouncing back. It made a strong green candle with big volume as it closes above 50-DMA. The volume recorded today is 3-fold the previous trading session. Closing positive since 3 trading sessions, the stock continues its momentum and one can find this stock to trade even higher in coming days.

Apollo Hospitals: The stock of Apollo Hospitals zoomed over 4% in today’s trading session.  The stock is trading near its all-time high and above average volume witnessed today indicates the buying pressure. The stock is rallied in rent times and looks to continue this momentum evident from its price action. The RSI shows great strength at 73 as the stock looks to scale newer highs.  A strong green candle shows the buyer’s interest and is attractive for short term.

Ador welding: Taking support of its 20 and 50-DMA, the stock surged 8% on the trading session of Thursday. The volume recorded today is greater than 10 and 30-day average volumes. The stock has corrected a little after recording its all-time high level. Strong institutional buying evident from the higher volume indicate a possibility for more upside. The stock looks to gain momentum and will test its all-time high levels shortly.

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These stocks see huge volume burst in the last leg of the trading session!

These stocks see huge volume burst in the last leg of the trading session!
by 5paisa Research Team 25/11/2021

Aster DM Healthcare, Fine Organics, and Future Retail have witnessed volume burst in the last 75 minutes of the trade.

As the saying goes, the first and the last hour of each trading session is the most important and active in terms of price and volume. More so, the activity in the last hour is said to be of utmost importance because most of the pro traders and institutions are active at this time. Hence, when a stock sees a good spike in volume in the last leg of trade along with price rise it is said to be the pro and institutions have a keen interest in the stock. Market participants should keep a close watch on these stocks as they can witness good momentum in the short-medium term.

So, based on this principle we have shortlisted three stocks, which have witnessed volume burst in the last leg of trade along with price rise.

Aster DM: The stock rose 4.38% on Thursday. The stock traded flat throughout the day except for the last 75 minutes where it gained 4%. About 70% of total daily volume was recorded during this period. The stock is volatile since few days as it continues to make long candles. The last hour of buying by the institutions indicate that stock might be in focus for coming days.

Fine Organics:  The stock close at the record high at 3772.05, up 3.89%. This stock witnessed huge buying in the last hour as it gained 4.73% during this period. Most part of the daily volume was recorded in this phase. The stock is trading strong in medium term and shows no sign of stopping. More institutional participation can be expected in coming days, and one must keep a watch on this stock.

Future Retail: The stock of Future Retail is up by 3.37% on Thursday’s trading session. The stock is consolidating since few days and the clarity of a clear trend is lacking. However, huge buying towards the end might turn the things for the stock as the stock gained almost 4% in the last 75 minutes. Increasing volumes will help the stock to gain momentum. About 62% of today’s volume was recorded in the last 75 minutes.

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Penny Stock Update: These stocks gained up to 10% on Thursday

Penny Stock Update: These stocks gained up to 10% on Thursday
by 5paisa Research Team 25/11/2021

On Thursday, the Indian equity market closed on a positive note. BSE Energy index is the top gainer while BSE Capital Goods is the top loser in today’s trade.

Today, the Indian equity market closed on a positive note after being volatile in Wednesday’s trading session.

Nifty 50 and BSE Sensex indices closed with a green mark, up by 121.20 points i.e., 0.70% and 454.10 points i.e., 0.78%, respectively. Stocks supporting the rise of BSE Sensex and Nifty 50 index were Reliance Industries, Infosys, ITC and HDFC Bank. Whereas, stocks that dragged the BSE Sensex and Nifty 50 down were ICICI Bank, Bajaj Finance, HDFC and HUL. Today the BSE Sensex and Nifty 50 index opened up by 0.04% and 0.01% from the previous close.

In Thursday's trading session the S&P BSE Energy, S&P BSE Realty, S&P BSE Healthcare and S&P BSE Telecom were top gainers. BSE Energy index consisting of stocks such as Aegis Logistics Ltd, GOCL Corp Ltd, Reliance Industries Ltd and Asian Energy Services Ltd were the top gainers.

In today’s trade, S&P BSE Capital Goods, S&P BSE Auto, S&P BSE Dividend Stability Index and S&P BSE BANKEX were top losers. BSE Capital Goods Index consisting of stocks such as Siemens Ltd, V Guard Industries Ltd, Carborundum Universal Ltd and ABB India Ltd were the top losers.

Here is the list of penny stock that gained up to 10.00% on a closing basis on Thursday, November 25, 2021: 

Sr No.                  

Stock                  

LTP                   

Price Gain%                  

1.                  

Hindustan Construction Company Ltd  

10.55  

9.90  

2.                  

Jaiprakash Associates Ltd  

10.55  

9.90  

3.                  

Madhucon Projects Ltd  

5.55  

9.90  

4.                  

Patel Integrated Logistics Ltd  

16.10  

9.90  

5.                  

HCL Infosystems Ltd  

14.45  

9.89  

6.                  

Inventure Growth and Securities Ltd  

2.85  

9.62  

7.                  

Sanwaria Consumer Ltd  

0.80  

6.67  

8.                  

Gayatri Highways Ltd  

0.85  

6.25  

9.                  

Airan Ltd  

19.95  

5.00  

10.                  

FCS Software Solutions Ltd  

2.10  

5.00  

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F&O Cues: Key support & resistance levels for Nifty 50

F&O Cues: Key support & resistance levels for Nifty 50
by 5paisa Research Team 25/11/2021

The highest call option open interest for expiry on December 2, stood at 18,000 for Nifty.

Indian equity market gained on monthly expiry day on the back of positive news flow. Rating agency, Moody’s Investors Service in its latest report has projected that the economic growth in India will rebound strongly. It has pegged GDP growth for the nation at 9.3% and 7.9% in FY22 and FY23, respectively. After a drop in the first hour of trade, Nifty 50 continued to move higher.

There was not much activity on the F&O front for the next weekly expiry on December 2. Nevertheless, reading of today’s activity shows 18,000 to act as a resistance. The highest call option open interest (36,164) for Nifty 50 stood at a strike price of 18,000. In terms of the highest addition of open interest in the call options front, it was at 17,500 in the last trading session. A total of 18,237 open interest was added at this strike price. The next highest call option open interest stands at 17,500 where total open interest stood at 35,391.

In terms of put activity, the highest put writing was seen at a strike price of 16,500 (28,266 open interest added on November 25), followed by 17,400 (23,187 open interest added on November 25).

Highest total put open interest (45,583) stood at a strike price of 17,500. This is followed by a strike price of 17,400, which saw a total put option open interest of 45,343 contracts.

Following table shows the difference between call and put options at strike price near to max pain of 17500.

Strike Price  

Open Interest (Call option)  

Open Interest (Put option)  

Diff(Put – Call)  

  

17,200.00  

1165  

27156  

25991  

17,300.00  

2490  

36479  

33989  

17,400.00  

8599  

45343  

36744  

17500  

35391  

45583  

10192  

17,600.00  

31850  

12715  

-19135  

17,700.00  

27763  

7620  

-20143  

17,800.00  

29930  

6210  

-23720  

 

 

 

 

 

 

 

 

The Nifty 50 put call ratio (PCR) closed at 1.01 compared to 0.64  in the previous trading session. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish.

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Asian Paints faces fire from proxy advisory firm. Here’s what the fuss is all about

by 5paisa Research Team 25/11/2021

Asian Paints has been a bellwether stock that has outperformed the stock markets in the worst of times. Moreover, it is one of the most technologically advanced companies in the country, credited with bringing one of the first supercomputers to India back in the 1970s when few knew of what such a device was. 

Yet, in the last couple of days, the counter, which has been a darling of retail investors, has come under pressure after shareholder advisory firm InGovern raised corporate governance issues and pointed out several related-party transactions among Asian Paints’ promoters. 

What has the advisory firm actually said?

A report by the Business Standard newspaper, citing InGovern, said that the advisory firm had observed several related-party transactions between Asian Paints and Paladin Paints & Chemicals, a private company owned by the Dani family, who are also promoters of Asian Paints.

The report has brought to light, what it claims, are the likely conflicts of interest involving entities controlled by the Danis, which also supply raw material to the paint manufacturer.

As per a report by The Hindu Business Line newspaper, the advisory firm has also sought the removal of promoters Ashwin Dani and his son Malav Dani from the board.

The report claims that the capital markets regulator Securities and Exchange Board of India is already probing transactions involving Paladin Paints.  

The InGovern note cited by news reports said that, on October 24, Asian Paints put out “an innocuous clarification” to a news report. “We dug deep. APL’s FY15-16 annual report lists PPCL (Paladin Paints and Chemicals) as a related party from April 22, 2015. But APL, unlike most other companies, ‘does not list out’ the value of RPTs (related party transactions). Only an aggregate value is given,” it said.

InGovern said that Asian Paints needs to present details of related-party transactions with each of the promoter-controlled entities, including PPCL, in terms of transaction value and nature of trade. “Promoter directors who ‘control’ entities supplying goods to APL should immediately resign,” InGovern added. 

The advisory firm also said that the board of Asian Paints “failed to act decisively” to mitigate the conflict of interest. “In the interest of good governance, the company needs to present details of the transactions – values, nature and logic - with Paladin and other related parties controlled by promoters,” said InGovern.

Did anyone else also flag these concerns?

Yes, a whistleblower reportedly flagged these concerns about related-party transactions about a month back. 

What has Asian Paints said on the whole issue?

In a filing to stock exchanges, Asian Paints said that there was “certain factually incorrect” information in the InGovern report. It said the claim that Paladin formed 7% of the value of goods purchased from promoter-controlled entities was factually incorrect.

“Out of Rs 553.88 crore of total purchases from related parties during FY2019-20, total purchase from Paladin was Rs 1.3 crores (which is lower than 0.2%) of total purchases from related parties,” the filing said.

Is InGovern buying Asian Paints’ defence?

Not really. Shriram Subramanian, founder and MD of InGovern, said in a report by Business Insider India the fact that Asian Paints has to point it out means it hasn’t put out the details of the related party transactions in the first place.

“We are stating a fact that Asian Paints hasn't given details of value, nature of, and logic for RPTs against each RPT,” he said.

How has the stock performed?

The company’s shares fell 0.47% on Thursday to close at Rs 3,143.70 apiece on the BSE, where the benchmark Sensex gained 0.78%. The shares have lost a tad more than 10% since hitting a high of Rs 3,504 in September but are still up around 50% from their one-year low touched in November last year.

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