Informist, Tuesday, Jan 11, 2022
By Ankika Biswas
MUMBAI– Shares of Vodafone Idea made headlines today, as they tanked 23% to a one-month low on the company's decision to convert interest on adjusted gross revenue and spectrum dues into government equity. The decision did not sit well with the Street, given that it would result in high equity dilution for all the existing shareholders.
Post the conversion, the government will hold 35.8% stake in Vodafone Idea, while Vodafone Group and Aditya Birla Group will hold 28.5% and 17.8% stake, respectively.
The sharp sell-off was backed by strong volumes, as over 2 bln shares of the company changed hands on the NSE, significantly higher than their three- and six-month averages of 358 mln and 453 mln shares, respectively.
While this move does offer continuity of business for the beleaguered telecom operator, analysts believe that it comes at a huge cost, that of significant equity dilution.
However, from a big-picture point of view, the move will reduce the financial burden on the debt-laden company and help it make a comeback as a third major player. Further, this also reduces the company's heavy reliance on capital infusion, which is now likely to be lesser than anticipated.
Today, the stock closed nearly 21% lower at 11.80 rupees, after testing a one-month low of 11.40 rupees.
On the other hand, domestic headline indices ended today's lacklustre session in the green, with the Nifty 50 remaining firm above the key 18000-point mark, on buying in banking and information technology packs and shares of index-heavyweight Reliance Industries.
The headline indices had opened on a choppy note, tracking the weakness in global markets, as investors feared a likely further rise in inflation in December amid persistent anxiety driven by the expectations of a faster-than-anticipated interest rate hike by the US Federal Reserve.
However, thanks to the performance of banks and the information technology pack, as the Nifty 50 closed above the 18000-level for the second consecutive session.
Among frontline stocks, Wipro, Infosys and Tata Consultancy Services gained 0.1-0.9% ahead of their Oct-Dec earnings, scheduled to be released after market hours on Wednesday.
Today, the Nifty 50 closed 0.3% higher at 18055.75 points, traversing between a low and high of 17964.40 points and 18081.25 points. The Sensex ended 0.4% higher at 60616.89 points, after testing intra-day low and high of 60281.52 points and 60689.25 points.
The metals pack was one of the worst hit today, with some selling pressure also seen in automobiles and consumer goods.
Investment banking company Jefferies downgraded its ratings on Tata Steel and JSW Steel, and also cut their earnings estimates sharply citing weak demand for steel in China. This weighed on other metal companies as well, and consequently the Nifty Metal index was down nearly 2%.
Among other stock-specific action, Hinduja Global Solutions closed 6% higher as the company's board on Friday will consider buyback of shares.
Just Dial surged over 6% on buzz of the company entering into the retail e-commerce segment. Currently, JD Mart, powered by the company, operates in the wholesale segment.
Further, shares of Paytm owner One97 Communications had soared 5% in early trade as the company's loans disbursed surged over fivefold on year in the December quarter. This came at a time when brokerage firm Macquarie Research cut its price target on the stock by 25% on expectation of a revenue fall and increased expenses.
However, profit taking saw the stock close over 3% lower.
Following the demerger of its non-airports business, shares of GMR Infrastructure, the entity holding the airport business got listed at 43.75 rupees on the NSE today.
* Among Nifty 50 stocks, 25 rose, 24 fell and 1 was unchanged
* Among Sensex stocks, 16 rose and 14 fell
* On the NSE, 1,003 stocks rose, 1,067 fell and 38 were unchanged
* On the BSE, 1,933 stocks rose, 1,513 fell and 67 were unchanged
* Nifty IT: Up 1%; Nifty Bank: Up 0.3%; Nifty Metal: down 1.9%
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BSE National Stock Exchange
Sensex: 60616.89, up 221.26 pts (0.4%) Nifty 50: 18055.75, up 52.45 pts (0.3%)
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S&P BSE Sensitive Index Nifty 50
Lifetime High: 61353.25 (Oct 14) : Lifetime High: 18350.75 (Oct 14)
Record Close High: 61305.95 (Oct 14) : Record Close High: 18338.55 (Oct 14)
2022 1st day close: 59183.22 (Jan 3) : 2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 60223.15 (Jan 5) : 2022 Closing High: 17925.25 (Jan 5)
2022 Closing Low: 59183.22 (Jan 3) : 2022 Closing Low: 17625.70 (Jan 3)
2022 High (intraday): 60332.72 (Jan 5) : 2022 High (intraday): 17944.70 (Jan 5)
2021 Closing High: 61305.95 (Oct 14) : 2021 Closing High: 18338.55 (Oct 14)
2021 Closing Low: 46285.77 (Jan 29) : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 61353.25 (Oct 14) : 2021 High (intraday): 18350.75 (Oct 14)
2021 Low (intraday): 46160.46 (Jan 29) : 2021 Low (intraday): 13596.75 (Jan 29)
2020 Closing High: 47751.33 (Dec 31) : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23) : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31) : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24) : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20) : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19) : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28)) : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23) : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26) : 2017 High(intraday): 10515.10 (Dec 26)
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End
Edited by Pranav S. Joshi
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