- #Sensex, #Nifty trend lower
- #AdaniGroup companies gain post #Hindenburg verdict
- #NiftyIT cracks
Find out what's happening in trade today with Hersh Sayta and Smriti Chaudhary on 'Market IQ'. #NDTVProfitLive
- #AdaniGroup companies gain post #Hindenburg verdict
- #NiftyIT cracks
Find out what's happening in trade today with Hersh Sayta and Smriti Chaudhary on 'Market IQ'. #NDTVProfitLive
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TVTranscript
00:00 Supreme Court gives clean chit to Adani group in Hindenburg case, dismisses all allegations,
00:28 says there is no need to interfere with SEBI probe.
00:50 Sectoral indices off lows following Adani verdict, PSU banks, Realty and Oil & Gas extend
00:56 gains.
01:13 India's manufacturing PMI falls to 18-month low in December, falls to 54.9 in December
01:19 from 56 in November.
01:32 Petroleum Minister Hardeep Singh Puri has poured water on fuel price cut expectations.
01:37 He said there has been no discussion with oil companies on the fuel price cuts.
01:51 Hello and welcome.
02:10 Before we start off, let's take a look at the markets.
02:13 The benchmarks are a little weaker today, down about half a percent.
02:17 However, the broader markets continue to outperform, Nifty mid cap up about three tenth of a percent
02:23 and small cap up about two tenth of a percent.
02:27 Among sectors, there is a lot of weakness in IT today, down over two percent.
02:32 However, a mixed bag there in the sectors, auto, bank, metals, all in the red today.
02:40 The bank, Nifty, PSU bank gains and is up about one and a half percent there.
02:48 There's also some strength in FMCG, media, oil and gas and pharma as well.
02:54 If you look at the constituents within the Nifty 50, Adani takes the prize with gains
03:01 of over two percent and two Adani stocks, Adani Enterprises and Adani Ports, both up
03:10 and moving, followed by Apollo Hospitals.
03:13 However, there's a lot of weakness in metals.
03:16 So, JSW Steel, Hindalco, both in red, down over three percent in trade today.
03:21 However, the buzzing stocks today are the Adani Group stocks that are gaining after
03:27 the Supreme Court verdict.
03:29 The market has taken positive cues from that.
03:32 However, we'll talk more on this going ahead.
03:36 Right.
03:40 And you know, quickly moving on to stocks, State Bank of India has raised a billion dollars
03:46 via syndicated loans, the largest such transaction in recent years.
03:51 Meanwhile, RBL has sold 800 crore rupees worth of stressed loans at a discount of 97 to 98
03:58 odd percent.
03:59 To tell us all about both of these big moves, let's go across to my editor or our editor
04:07 rather, Vishwanath Nair, who's joining in.
04:09 Over to you, Vishy.
04:10 Right, Harsh.
04:11 Thank you so much.
04:12 So, State Bank of India has raised about a billion dollars through a syndicated loan.
04:17 Now, this is solely underwritten by HSBC and this is the largest such transaction that
04:23 has happened in the banking space since 2018.
04:27 What we understand from State Bank of India's managing director, C.S.
04:31 Sethi, is that these funds are going to be used for long term loan growth as well as
04:35 liability management.
04:37 And according to HSBC, which is, as I said, the sole underwriter of this loan, there is
04:41 a lot of interest in the SBI opportunity, primarily because it is a proxy for the India
04:46 story and that is what is pushing SBI forward.
04:50 On the RBL bank story now, there, what we understand is that 800 crore worth of distressed
04:55 credit card loans have been sold in a distressed asset transaction at a discount of about 97
05:01 to 98 percent.
05:02 So, the bank essentially stands to gain about 2 to 3 percent of that 800 crore in terms
05:07 of returns on that asset.
05:08 Now, remember, there is no requirement for additional provisioning on these assets, primarily
05:13 because these are fully written off accounts.
05:16 And once they are sold, essentially the bank can clean up its balance sheet.
05:20 The bank can also ensure that its employees or its officials are focused on growth rather
05:24 than recovery.
05:25 Recovery is the problem of the person who is buying these loans.
05:28 According to news reports, it is Kotak Mahindra Bank.
05:30 We have not been able to independently verify that information.
05:34 But that's where these two banks are headed right now, Harsh.
05:38 Right.
05:39 Thanks so much for that, Vishy, especially you are looking at almost 2 percent move on
05:42 RBL bank.
05:43 But the top story today, Supreme Court has given a clean chit to the Adani group in the
05:48 Hindenburg case.
05:50 The top court said there is no merit in the case to be transferred to the CBI.
05:55 We have with us Neeraj Shah, who joins us to give us a quick wrap on this.
05:59 Neeraj, over to you.
06:03 Well, you know, we can call it a clean chit to the Adani group or that the Adani group
06:09 has been vindicated.
06:10 Now, what's happened?
06:11 I'll tell you very quickly the summation of the events that have happened.
06:15 Right.
06:16 The key decisions taken by the Supreme Court today.
06:18 It's directed to complete the remaining two investigations.
06:21 Remember, 22 out of 24 were completed.
06:24 Two more investigations has directed to complete the remaining two investigations, preferably
06:29 in three months.
06:30 People have expressed doubt over whether this can happen in three months or not.
06:32 But be that as it may, this is the decision that has happened.
06:35 SEBI is going to probe whether Indian investors suffered loss due to the Hindenburg report.
06:40 I think this is a big one as well.
06:43 And SEBI is going to probe whether short positions in the Adani group resulted in infraction
06:47 of law.
06:48 So these were, to my mind, the key decisions and they were the key statements made by the
06:53 CGI which stood out for me.
06:55 And I thought I should bring them to you.
06:57 One, the CGI said that allegations of conflict of interest by the SC appointed committee
07:02 unsubstantial, ruled out, thrown out of the window.
07:07 The answer of investigation from SEBI to CBI not warranted.
07:12 It stays with SEBI.
07:13 There are so many conversations in the PIL about why SEBI is not the only one and some
07:19 other body should be given this.
07:22 Nothing doing.
07:23 Petition, the CGI said, petition in the Adani Hindenburg matter stands disposed of.
07:28 I think this is the tallest thing from an Adani group perspective.
07:32 They mentioned also that reliance on newspaper articles to question comprehensive investigation
07:37 by a regulator doesn't inspire confidence.
07:41 Some very tall statements and some very interesting observations made by guests as well, who
07:47 we spoke to earlier in the day, Sandeep Parekh, Siddharth Luthra, Abhay Agarwal, and we'll
07:52 bring about those as well.
07:54 But the impact that happened as a result of that was interesting.
07:57 First, Gautam Adani put out a tweet saying that Honourable Supreme Court's verdict shows
08:02 that truth has prevailed.
08:03 Satya meva jayate.
08:04 I think a very, very nuanced statement, nothing too flashy, none expected from him in any
08:11 which ways, but came out.
08:12 He says that I'm grateful to those who stood by us.
08:14 Our humble contribution to India's growth story will continue.
08:18 Jai Hind.
08:19 So that was the tweet that came out promptly from the head honcho of the Adani group once
08:24 this decision was out.
08:26 The impact, Adani group added about over 55,000 crores of market cap today at its peak, even
08:32 more, and added about 8.19 lakh crore or 8.2 lakh crores in market cap since the Hindenburg
08:38 laws.
08:39 So that was the other thing.
08:40 The views expressed on Adani group, well, Siddharth Luthra mentioned that the wholesome
08:43 victory for the exoneration of the Adani group, that was one.
08:47 And also saw some market views.
08:49 Some people said, and this is people who said on air and people that I spoke to, that one,
08:54 it's back to business as usual for the group, focus entirely on the pace of execution.
08:59 This was one of the views that was expressed.
09:01 Another one was that glad that the lending cycle didn't break and no lender tried to
09:05 pull capital in 2023 when the issue was at its peak.
09:09 Another view was the infragrowth stories within the group look extremely promising and therefore
09:13 because it's back to usual, that will come into the frame.
09:16 And promoter fund infusion into some of the businesses inspire confidence because they
09:20 haven't happened at a steep discount to the current market price, notably in one of the
09:24 companies in which the promoters have taken warrants.
09:26 So this is the long and short of the key developments that happened and the views that people have
09:31 given.
09:32 Now somebody who looks at this and somebody whose opinion is valued very, very highly
09:38 is Sandeep Parekh.
09:39 He needs no introduction.
09:40 He joins us on the show and I would love to extend a welcome to him and try and understand
09:43 from him what he made of it.
09:45 Remember, he's given some of his views when the matter broke, but Sandeep, thank you for
09:49 taking the time out.
09:50 Thanks for your patience while we were coming to you as well.
09:52 To your mind, Sandeep, what stood out out of this whole issue thus far and more importantly
09:58 a statement from the Supreme Court today?
10:00 I can summarize what really stood out in a single sentence.
10:06 I think it would be this that SEBI is competent, empowered and the right body to carry out
10:15 the investigations.
10:17 I think they basically debunked all the allegations which have been leveled against SEBI's competence
10:25 and fairness and they've said let them do their job and let's kind of defer to their
10:31 expertise and really I think they've also relied on the expert committee which goes
10:38 into how to improve the enforcement structure within SEBI and they've said SEBI should look
10:42 at it and should look at the government in terms of how to improve the enforcement in
10:46 the future, but not really.
10:47 If you read the report, it's kind of not so much connected to the Dhani matter so much
10:54 as how SEBI conducts investigations.
10:56 Yeah, I mean things like the transfer of investigation from SEBI to other agencies not warranted
11:03 kind of amplifies the point that you're trying to make as well, but also some other pieces
11:09 about how reliance on newspaper articles to question comprehensive investigation by regulators
11:14 doesn't inspire confidence.
11:15 We were speaking to a few people, Sandeep, who mentioned that while the SCA has been
11:20 trying to say this for a while now, it still continues to happen.
11:25 Because this case was so much in the public glare, maybe more so than some others, does
11:29 this set a precedent of any sort whatsoever for what kind of petitions get taken to the
11:34 Supreme Court, does not waste the time, so on and so forth?
11:38 Unfortunately not, because I think we end up being a little more society so people continue
11:43 to file cases and there aren't too many adverse consequences to filing frivolous cases.
11:50 And therefore, I don't see kind of, but I think it's still kind of a victory for SEBI
11:56 if you think about that.
11:57 It's competent, unbiased and a very functional regulator who can take care of the markets.
12:04 And if you again, if you look at World Bank report on comparativeness of India, you find
12:10 India in the top five countries for investor protections.
12:14 I think it vindicates SEBI more than ever that let them do their job.
12:19 I have last couple of questions, Sandeep, and something that might have some future
12:25 impact if you will, and whether it kind of changes how we look at a few key things that
12:33 happen in capital markets.
12:35 SEBI to probe whether short positions in the Adani Group resulted in infraction of the
12:38 law or the fact that SEBI will probe whether Indian investors suffered loss due to the
12:42 Hindenburg report.
12:43 There's so much chatter around short selling globally, practices out there in India and
12:49 what kind of regulations could be there, if any.
12:53 And I'm just trying to understand when you think about it, and the fact that SEBI has
12:57 been given the mandate to go out and probe, what can come out of something like this?
13:02 I think the Supreme Court was clear in terms of they want SEBI to look at the short selling
13:07 angle as well and look at whether mischief, you know, short selling by itself may not
13:11 be wrong, but when it's manipulative, it's certainly illegal and it's deemed to be a
13:16 fraud.
13:17 I think it's important for SEBI to get into this matter, and I think the ruling does talk,
13:23 will talk about what SEBI needs to do in terms of investigation of the short sellers.
13:32 I think, again, it's something which probably will take a couple of months for SEBI to get
13:37 into and see whether any mischief did take place about it.
13:41 Okay, last question.
13:42 I know for the Adani group it's a big victory, but just wondering because this is a SEBI
13:46 related outcome as you said, is this in your mind any kind of, okay, landmark is maybe
13:52 too strong a word, but any material development from this judgment from a law or a regulation
14:01 perspective or do you think this was more par for the course, from a perspective of
14:05 what it means for SEBI and the workings?
14:10 So I think it's, even more than the Adani group, I think it's a shot in the arm for
14:15 the government and SEBI because it kind of gives primacy to their abilities, their kind
14:21 of lack of bias in kind of conducting a fair investigation and I think it will have a salutary
14:27 effect on other matters, though, you know, I started by saying that it's not going to
14:32 reduce significantly the number of frivolous complaints which take place in other matters,
14:39 but at the same time it will have, you know, it will definitely be good for morale of SEBI
14:44 which has been on the back foot till now in terms of justifying that it's been fair.
14:50 Sandeep Parekh, take a moment to thank you for joining us today and giving us your thoughts,
14:55 really appreciate your time.
14:57 Thanks.
14:59 Just as we sum up this piece, the last point on this is, of course, that the point that
15:07 the people in the market are making and that was one of the points that I mentioned as
15:11 the view that now it is back to business as usual and therefore focus goes completely
15:18 and entirely on valuations and if valuations are stretched within the eight or nine or
15:22 ten group companies listed, then there might be an impact thereof, but it's back to business
15:27 as usual, the bogey of a verdict coming in and hampering proceedings is now out of the
15:35 window and that for investors as well, not just the group, but investors as well is a
15:42 big sign of relief.
15:43 A very standard disclosure, the Dhani Group owns NDTV and you are watching this broadcast
15:48 on NDTV Profit, so that should be taken into account.
15:51 Right.
15:52 Thanks so much for taking us through all of those nuances, if I can call it Neeraj, as
16:00 well as our guests on the show.
16:03 But let me quickly flag off both Adani names.
16:06 We are looking at Adani Enterprises, which is now the top gainer on the Nifty 50 up 2.1%
16:12 in trade today.
16:13 And you're also seeing gains on Adani Ports, which is up 1.3%.
16:18 A quick check on the breadth of the market to also determine as to where we are placed
16:23 with regard to the market breadth.
16:26 There you go.
16:28 You're seeing a slight bit of change coming through after the advances have now exceeded
16:34 the declines as we speak.
16:36 But we'll slip into a very short break.
16:38 More, of course, on the other side.
16:40 You are watching Market IQ on NDTV Profit.
16:42 Do stay tuned.
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19:12 - Welcome back, you're watching Market IQ on NDTV Profit.
19:21 Now last week there were media reports suggesting
19:24 retail price, oil price cuts.
19:27 However, oil minister, Hardeep Singh Puri,
19:29 has now clarified on the issue in a press conference.
19:32 He said that there has been no discussions
19:35 with OMCs on the fuel price cut.
19:37 Remember last week, as I just said,
19:39 that there were some media reports
19:41 and stock prices also kind of got affected
19:44 and OMCs saw a sharp fall in the prices after this news.
19:49 Here's what he had to say, listen.
19:53 (air whooshing)
19:54 - I have clarified there has been no discussion
19:57 with the oil marketing companies on any such issue.
20:01 And please, we are in a highly turbulent situation.
20:04 Turbulent (speaking foreign language)
20:06 There are two areas on the globe, global map,
20:11 which are in conflict situation, okay?
20:14 So, (speaking foreign language)
20:19 We've had challenges to shipping.
20:22 (speaking foreign language)
20:24 I'm weighing them.
20:25 We've had challenges to shipping in one particular area.
20:30 (speaking foreign language)
20:35 Four to 8% of global LNG cargos
20:41 went through this area in 2023.
20:44 And 8.2 million barrels per day of crude oil,
20:49 8.2 comes through this.
20:52 (speaking foreign language)
20:52 If there is a further challenge or there is a disruption,
20:57 do you see the kind of impact that can be caused?
20:59 Now, we are navigating this very carefully.
21:03 (speaking foreign language)
21:06 But in this kind of a situation,
21:14 our primary responsibility and that of all the other
21:18 operators in the ecosystem is to ensure
21:21 that there is availability.
21:22 And that availability does not come at a slightly,
21:25 you know, at an enhanced price.
21:27 At price of crude oil also,
21:30 I monitor this on a daily basis.
21:32 Number one, it had gone up to 80 plus.
21:36 (speaking foreign language)
21:38 But in a highly volatile situation,
21:40 our primary responsibility is to ensure
21:43 availability and affordability.
21:45 (speaking foreign language)
21:48 (speaking foreign language)
21:52 - That was Hardeep Singh Puri clarifying
21:59 that there are no retail price cuts in petrol and diesel.
22:04 However, shifting focus to important macro data,
22:07 the HSBC India Manufacturing Purchasing Manager's
22:09 index survey conducted by S&P Global
22:12 fell to an 18 month low in December
22:14 as growth momentum faltered.
22:17 Pallavi is joining us to give us more details on that.
22:20 Pallavi, take it away.
22:22 - Hi Smriti, so like you've said,
22:24 the HSBC India Manufacturing PMI
22:27 has fallen to an 18 month low,
22:29 essentially indicating some loss in growth momentum.
22:34 The PMI in December came in at 54.9.
22:38 That's compared to a figure of 56
22:41 that we saw in the month of November.
22:44 Now, just to understand what this print means,
22:47 a figure above 50 still indicates expansion.
22:52 Now, let's have a look at some key takeaways
22:55 from today's data very quickly.
22:57 There was a rise in both output as well as new orders,
23:02 but again, this was a softer pace of growth
23:05 than we've been seeing in previous months.
23:08 Business confidence towards the year ahead outlook
23:11 remains strong to be sure.
23:13 Input cost inflation has come in
23:17 at among the weakest prints in almost three and a half years
23:21 and employment as well was largely stable as per this data.
23:26 I think what's going to be important going forward
23:30 is to see how the next few prints come in
23:33 to truly see if there has been some de-exhilaration
23:38 in manufacturing growth momentum,
23:40 which has held up and remained fairly strong
23:43 so far in the current fiscal year.
23:46 - Absolutely, thank you so much for that, Pallavi.
23:50 Impressive set of numbers
23:51 from the manufacturing front continue.
23:54 But let's quickly move on.
23:55 DMart retail has been in focus
23:58 and Avenue Supermarts received a mixed response
24:01 from brokerages on its Q3 business update.
24:04 Mahima is here, gonna talk to us about all of that
24:08 and give us some perspective on some of those numbers.
24:10 Mahima, take it away.
24:11 - Right, so as you rightly mentioned,
24:12 the brokerages have a mixed review on this one.
24:15 But before I go to the brokerages, a quick company update.
24:18 They came up with the revenue numbers
24:19 for December 31st ending
24:21 and the revenue has been up 17% year on year.
24:24 And they've also mentioned that five new store additions
24:27 took place in the third quarter.
24:28 So their total stores as of 31st December stands at 341.
24:33 Now coming to the brokerages report,
24:35 Citi came out with a brokerage report on Avenue Supermarts.
24:38 It maintained sell rating with a target price of 3,100.
24:43 Now this is on the back of the Q3 update
24:47 that the company gave.
24:48 They believe that the throughput remains weak
24:50 and slower store growth is a bit disappointing.
24:53 Also, they believe that revenue per square feet
24:56 remains impacted by inferior product mix
24:59 and new store additions in smaller towns.
25:01 They've also mentioned that they remain cautious
25:03 at the current valuation given risks
25:05 around the store additions.
25:07 Now, we also had a brokerage report by Morgan Stanley,
25:10 which is quite opposite to what Citi's take was
25:14 on Avenue Supermarts.
25:15 They said that Avenue Supermarts still remains their top pick
25:18 and overrated it with a target price of 4,471.
25:23 They believe that the Q3 standalone revenue
25:25 was however 5% lower than their estimates,
25:28 but network expansion in Q4
25:30 remains a key monitorable for them.
25:32 They've also given risks to upside and downsides
25:35 and overall if we see the stock performance
25:39 has been pretty bad today.
25:42 Their stock have fell by 3.44%.
25:44 So this is overall the view of Avenue Supermarts today.
25:47 - Right, thank you Mahima for that
25:49 and that's all we have on today's edition of Market IQ,
25:54 but lots more coming up.
25:55 Stay tuned to IndyTV Profit.
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