HDFC Bank Unit Eyes Rs 2,500 Crore Offshore Loan

Hello,
Markets experienced volatility yesterday and closed flat as investors adopted a cautious stance ahead of today's budget announcement. Additionally, the release of the Economic Survey provided valuable insights into industry outlooks. We will provide a detailed analysis of the Economic Survey later this week. Further, HDFC Bank's unit is in discussions with global banks to secure a $300Mn offshore loan.

The Union Budget will be presented at 11 a.m. today. Anticipate that most headlines will focus on the budget's implications for the Indian economy, markets, and various industries.

Markets📊 
As of 22/07/2024 Market Close

• Indian benchmark indices concluded a turbulent session with slight losses yesterday. The cautious economic growth forecast for FY25 outlined in the economic survey has contributed to increased volatility ahead of the budget.

• Despite this, the Auto and Pharma sectors each gained over 1%, emerging as the top performers of the day, whereas the Realty sector lagged significantly.

• With the Union Budget looming, heightened volatility is anticipated to persist into Tuesday.

Notable Gainer & Loser📈📉 
Source: Moneycontrol

Oberoi Realty Ltd +4.40%

• Shares surged by as much as 4.4 percent following the company's strong earnings performance for the April-June quarter of FY25.

• The real estate giant's net profit nearly doubled, rising by 82 percent year-on-year to Rs 584.50 crore in Q1 FY25, compared to Rs 321.60 crore in the same quarter of the previous fiscal year.

• This significant increase in net profit was driven by robust revenue growth of 54.4 percent, reaching Rs 1,405.20 crore for the quarter, up from Rs 910 crore in the year-ago period.

One 97 Communications Ltd (1.34%)

• Shares dropped 2 percent after the fintech company reported disappointing results for the quarter ending June 2024.

• Paytm announced that its net loss had widened by 2.5 times year-on-year, reaching Rs 839 crore. Revenue from operations decreased by 36 percent year-on-year to Rs 1,502 crore in Q1FY25.

• The company continues to grapple with the impact of RBI restrictions shutting down its payments bank business.

Yesterday’s Highlights📒 

• The PLI scheme for the auto sector has attracted investment proposals totalling Rs 67,690 crore. (ET)

• The Economic Survey calls for enhanced liquidity to improve the discovery of prices for NPAs. (ET)

• There are increasing calls to address regulatory gaps in the fintech sector. (ET)

• The Economic Survey highlights that India must address its reliance on China for critical minerals. (ET)

• A CRR reduction will assist banks struggling with low deposit growth. (BS)

• The Gem Promotion Council will partner with local stakeholders to enhance the market for Kashmir sapphires. (ET)

• Demand is rising for the creation of a new NBFC-PSL category in the Budget to boost the MSME sector. (YS)

Featured Highlight💡 

Potential Impact of the Union Budget Announcement On the Markets

The Union Budget announcement today is highly anticipated due to the Indian markets' current delicate state. Over the past year, markets have seen a continuous bull rally with indices like Nifty and Sensex hitting new highs, though some sectors are considered overvalued. Key points to watch for include:

• Taxes: Any increase in capital gains tax could trigger a significant market sell-off.

• Policy Changes: Continuation of the government's long-term focus on sectors such as defence, renewable energy, railways, infrastructure, and PSUs is crucial. A reduction in overall capital expenditure is expected, but maintaining the trend is essential.

• Market Sensitivity: Given the overstretched valuations in some sectors, any drastic policy shifts or fiscal measures could lead to significant market volatility.

IPO / Issuances🚀 

• Stallion India Fluorochemicals has received SEBI approval to proceed with its IPO. (Moneycontrol)

• Sanstar IPO was 13.47 times subscribed on day 2, with NIIs leading. (Moneycontrol)

This week’s mainboard IPO schedule

• Sanstar (RHP)

  • Offering Period: 19-23 July, 2024

  • Listing Date: 26 July, 2024

  • Issue Price: 90-95

  • Lot Size: 150

Deal Activity🤝 

M&A / Investments

• The CCI has sent antitrust queries to Reliance and Disney regarding their $8.5 billion merger. (BS)

• Bhutani Group has acquired a majority stake in WTC Noida through a revenue-sharing agreement. (ET)

• Amazon India is negotiating a deal with Instamart, coinciding with Swiggy's IPO filing. (BS)

Debt

• HDFC Bank's unit is in discussions with global banks to secure a Rs 2,510 crore ($300Mn) offshore loan. (BS)

• PC Jeweller has reached a settlement with lenders, offering Rs 2,250 crore ($268Mn). (ET)

VC

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