Uncharted Territory for Markets

BajFinserv gets MF approval, Infy does it again

Hi, Ashish here.

Welcome to this edition of the Newsletter.

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The Nifty 50 has made a new high of 16,722 this week with strong support coming in from utilities & materials and energy. The index closed 1.55% (254.70 Points) higher for the week. The equity markets are trading now in uncharted territory, so a lot of uncertainty. A good bounce-back was seen in Mid and Small-cap space this week.

Here are some of the updates and news about financial markets in the week gone by.

MF Industry to get a new Competitor 😎

On Tuesday, Bajaj Finserv received a principle approval from SEBI to commence Mutual Fund Business. The MF industry is already having 42 MF houses but the majority market share is held by the top 5 mutual fund houses. Bajaj Finserv with its sister concern Bajaj finance can do very well in MF business with its strong distributor and customer network. Mutual funds have became popular financial products across Tier I and Tier II cities after March 2020 fall. The total Assets Under Management (AUM) is now at an all-time high of ₹35 lakh crore in July-end.

Well, other news was from Kotak AMC on 27th August. SEBI has banned Kotak AMC from launching a new Fixed Maturing Plan for the next 6 months, also imposes a fine of Rs 50 lakhs. This order was passed after SEBI noticed that certain FMPs launched by Kotak Mahindra MF haven't paid their full proceeds based on the declared Net Asset Value (NAV) as on their respective maturity dates.

SBI Balanced Advantage Fund has made a new record. The New Fund Offer is the highest grossing among the equity NFOs till date. The fund has collected around Rs 13,000 crore in its NFO period that ended on August 26. This fund will automatically shift from equities to debt instruments when equity markets go up substantially and vice-versa.

Reliance & Vaccine

Reliance Life Sciences seeks approval for phase I trial of its Covid Vaccine. According to Business Insider, the subject expert committee (SEC) is said to have reviewed its application on Thursday and has given its approval.

Then GSTN and Now Income Tax Portal:

Many faced problems with the GST portal for more than a year after its introduction in July 2017. Still today some of the problems are not solved. Infosys was the one who was awarded a contract worth Rs 1,320 crore to build and maintain the technology network for implementing the GST system across the country in 2015. The same Infosys was paid Rs 164.5 crore for developing the e-filing tax portal by the government. The new e-filing portal was launched in early June this year ahead of return filing season for Assessment Year (AY) 2021-22. Like, GST Portal, the new IT Portal is also facing glitches that are yet to be resolved. On account of this, Infy CEO Salil Parekh was summoned by Finance Ministry to explain glitches in the new income tax e-filing portal.

Adani Wilmar… have to wait 

The agro-commodity company of Adani group has to wait longer to go public. SEBI has put a hold on Adani Wilmar’s initial public offer. Read more about this here.

Dream month for Primary Markets

Numerous public offers hit Dalal Street in the month gone by. Eight companies have collected Rs 18,243 crore through IPO so far in August, which is the highest in a month since November 2017, when three companies raised to Rs 18,838 crore through IPOs. Well, many big names are lined up for going public in the coming months. Investors are most excited for the new age Tech businesses after the listing of Zomato. But, shouldn’t investors care for the higher valuations of such debutants or upcoming IPOs? Time will tell….

Talking about IPO, ReNew Power, which is India’s largest renewable energy producer, lists at Nasdaq through SPAC. The company’s market cap hit $4.5 Billion. A Special Purpose Acquisition Company (SPAC) is a company with no commercial operations that are formed strictly to raise capital through an initial public offering to acquire an existing company. To understand how SPACs work, check out this blog.

Daily Vaccine Doses crosses 1 Crore on 27th August

India records the highest vaccination numbers this Friday. More than 1 crore doses were administered in a single day. The total number of vaccine doses given till Saturday is above 60 Cr (Including 1st & 2nd Dose).

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Take Care :-)