SEBI's New Fee Rules: Brace for Higher Trading Costs?

Hello,
Markets ended flat as there was volatility due to profit booking after all-time highs were reached during the trading session. SEBI’s new circular might have far-reaching consequences for retail investors and brokerages alike, find out why in our featured highlight section below 👇️

Markets📊 
As of 02/07/2024 Market Close

• Lately, the Indian stock market has been characterized by a sell-on-rise and buy-on-dips strategy. This pattern persisted yesterday as the Nifty 50 and the Sensex reached new all-time highs during intraday trading but ended with mild losses due to weak global cues.

• Indices ultimately closed flat after a highly volatile session.

Notable Gainer & Loser📈📉 
Source: Moneycontrol

Larsen and Toubro Ltd +2.73%

• Shares rose 3 percent after the company secured orders worth over $4 billion from Saudi Aramco for expanding its gas projects.

• The Rs 35,000 crore order is for Aramco's gas compression systems, part of its $25 billion contracts for engineering, procurement, and construction (EPC) works related to the $110 billion Jafurah gas project in the eastern province.

Angel One Ltd (8.59%)

• Shares fell nearly 9 percent following SEBI's new circular revising the market intermediary charge mechanism. SEBI stated that Market Infrastructure Institutions (MIIs) like stock exchanges and clearing corporations should not offer discounts based on turnovers.

• This revision could impact revenues for discount brokers, who earn a significant portion of their income from such charges with a large base of retail customers and lower volume/ticket size.

Yesterday’s Highlights📒 

• L&T executives have stated that the Rs 35,000 crore ($4.19Bn) order from Saudi Aramco is their biggest ever. (BS)

• HDFC Bank could potentially see inflows of up to Rs 33,000 crore ($4Bn) as its MSCI weightage is set to increase. (BS)

• Public sector banks in India are navigating the credit card market, facing challenges with high NPAs. (ET)

• Zomato has withdrawn its NBFC application and stated it has no plans to pursue lending activities. (BS)

• The government has proposed new guidelines aimed at accelerating power supply to EV charging hubs. (ET)

• Mercedes-Benz India seeks a long-term policy commitment for electric mobility. (TT)

• BMW India has achieved record sales of 7,098 units in the January to June period. (ET)

• Hindenburg has received a show-cause notice from SEBI regarding issues related to Adani. (BS)

Featured Highlight💡 
Sources: BS, Mint, Moneycontrol

SEBI Shakes Up Indian Broking: Uniform Fees to Level Playing Field?

• SEBI has instructed stock exchanges and market infrastructure institutions (MIIs) to abandon slab-wise fee structures and implement uniform fees for all market participants by October 1, 2024. This move aims to ensure fairness and transparency by eliminating preferential treatment based on trading volumes.

• The directive intends to standardize charges across brokers and MIIs, aligning fees with what is passed on to clients. This change is expected to impact brokerage firms like Zerodha, which may need to adjust their fee structures, potentially affecting the broader industry dynamics.

• Following SEBI's announcement, shares of several brokerage firms, including Angel One, Motilal Oswal Financial Services, and others, declined. The market reaction reflects concerns about the implications of the new fee structure on profitability and competitive dynamics within the broking industry.

• SEBI's initiative is part of efforts to promote a more equitable trading environment, discouraging excessive trading and ensuring that charges are transparently passed on to end clients. The shift aims to benefit investors by potentially reducing costs associated with trading activities.

IPO / FPO / Issuances🚀 

• Emcure Pharmaceuticals has raised Rs 583 crore ($69.8Mn) from anchor investors ahead of its IPO. (Moneycontrol)

• Bansal Wire Industries has mobilized over Rs 223 crore ($26.7Mn) through its anchor book ahead of its IPO. (Moneycontrol)

• Remedium Lifecare's stock rose 8% as its board considers raising Rs 200 crore ($24Mn) through Qualified Institutional Placement (QIP). (Mint)

• Allcargo Gati has raised Rs 169.28 crore ($20.2Mn) by issuing equity shares through a QIP. (BS)

• Carysil has commenced its QIP today, setting the floor price at ₹837.89 per share. (CNBCTV18)

• BMW Ventures, a distributor of steel products, has filed IPO papers with SEBI. (Moneycontrol)

• Officer's Choice Whisky maker Allied Blenders' shares closed with over 13% gains on their debut trade. (Moneycontrol)

This week’s mainboard IPO schedule

• Emcure Pharmaceuticals (RHP)

  • Offering Period: 03-05 July, 2024

  • Listing Date: 10 July, 2024

  • Issue Price: 960-1008

  • Lot Size: 14

• Bansal Wire Industries (RHP)

  • Offering Period: 03-05 July, 2024

  • Listing Date: 10 July, 2024

  • Issue Price: 243-256

  • Lot Size: 58

Deal Activity🤝 

M&A / Investments

• Vodafone UK is considering a Rs 2,000 crore ($239Mn) equity top-up for Vi. (ET)

• The Adi-Nadir family is set to acquire a 12.65% stake in Godrej Industries from RKN Enterprises. (BS)

Debt

• Bike Bazaar raises Rs 25 crore ($3Mn) in debt from MAS Financial. (EN)

VC🤑

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