During the previous week in the COMEX market,
prices of all the base metals such as Aluminum, Copper, Iron Ore, Lead and zinc
rallied as the bulls made a comeback in the commodity markets. Iron Ore rose
7.1%, Copper, Aluminum and Zinc rose by more than 3.5%, and Lead rose 2.5% as
compared to the previous week’s close. As for precious metals Gold and Silver
are concerned, both inched higher during the week, with Gold rising by 0.5% and
silver rising by 2.0%, closing the week at $1,818.00 and $27.07 respectively. Crude
oil moved up by 4% during the week on the hope that the economic recovery will
result in higher oil demand.
Gold and silver prices rose 2.2% and 4.2%
respectively on Tuesday, supported by optimism on further clues from the US
Federal Reserve regarding the interest rates. Investors also awaited clarity on
the COVID relief bill that is in process, US-China trade talks and rising
US-Iran tensions. However, the precious metals lost all its gains by the end of
the week, weighed by a stronger US dollar and higher US bond yields. In Indian
MCX markets, the upside movement in gold and silver has been capped by optimistic
view by the Reserve Bank of India in its latest monetary policy meeting
regarding the India economy.
For the current week, investors needs to keep an
eye on economic data such as Eurozone’s Industrial production and Trade Balance
on 15th Feb, Eurozone’s Flash GDP on 16th Feb, UK’s core
CPI, US’ core retail sales, core PPI, Industrial Production, FOMC Meeting
minutes on 17th Feb, ECB Monetary Policy Meeting Accounts, US’ Unemployment
Claims, Philly Fed Manufacturing Index, Crude Oil Inventories on 18th
Feb, UK’s retail sales, Eurozone’s, UK’s and US’ Flash Services and
Manufacturing PMI on 19th Feb.
For the upcoming week, the correction in gold
prices could help boost physical gold demand in India. Gold may continue to
reflect trend in US dollar with focus on global virus situation as well as US
stimulus and central bank monetary policy stance. We expect gold in COMEX
market to be in the range of $1,739 to $1,897, while silver is expected to be
in the range of $22.7 to $31.4. Whereas, for bullion market traders, we assume gold
futures to trade in the range of 45,236 to 51,183.
Founded in 2000, RailTel is one of the largest neutral telecom infrastructure providers in the country. It is the 7th issue to hit the equity markets in the year. The company can raise INR 819 crores at upper price band.
The issue includes a reservation of up to INR
5,00,000 worth of equity shares (1,250 equity shares) for subscription by
eligible employees
Issue Details
Strengths
Among the largest neutral telecom infrastructure providers in India with pan-India optic fiber network
Diversified portfolio of services & solutions
Key partner to the Indian Railways in digital transformation
Experience in executing projects of national importance with a robust pipeline of projects
Strong track record of financial performance
Valuation
The company reported
its EPS at INR 4.4 per share for the year ending March 2020, bringing the IPO
valuation to a P/E of 21.4 at upper price band, against sector PE of 30.4.
We recommend to apply
for the issue on the basis of its strong financials and high prospects of the
industry growth.
Issue Break-Up
Objects of Offer
The company will not receive any proceeds from the issue and will entirely to the Selling Shareholders.
Background highlights of the company in brief
RailTel Corporation, a “Mini Ratna (Category-I)” PSU is one of the largest neutral telecom infra providers in the country owning a Pan-India optic fiber network on exclusive Right of Way along Railway track.
RailTel was incorporated on September 26, 2000 with the aim of modernizing the existing telecom system for train control, operation and safety and to generate additional revenues by creating nationwide broadband and multimedia network, laying optical fiber cable using the right of way along railway tracks.
The company’s portfolio of services can be broadly classified in to Telecom Network Services (NLD Services, ISP Services), Telecom Infrastructure Services (IP-1 Services), Managed Data Center and Hosting Services (Data Centre and Managed Hosting Services, TPaaS), Projects (System Integration Services).
The company’s expertise includes: HD Video Conferencing Services, Data Center Services, RailWire, Leased Line, Virtual Private Network, Internet Leased Line, Managed Data Services, Consultancy Services, Rack and Space Collocation, Tower Collocation, NLD for Voice Carriage, Signaling Services.
RailTel has a strategic relationship with the Indian Railways and it undertakes a wide variety of projects including provision of mission critical connectivity services such as video surveillance system at stations and within trains, ‘e-Office’ services and implementing short haul connectivity between stations and long haul connectivity to support various organizations within the Indian Railways.
It also undertakes various passenger services including content on demand services and Wi-Fi across major railway stations in India.
Presently, optic fiber network of RailTel covers over 58,742 route kilometers and covers 5,848 railway stations across towns and cities in India.
In the past, it has undertaken various mission-mode projects for the Government of India including rolling out the National Knowledge Network, Bharat Net (formerly, the National Optical Fiber Network) and USOF funded optical fiber based connectivity project in North East India.
As for the telecom industry, there is likely to be a minimal impact of COVID-19 on telecom companies. The industry might have taken a small hit during the hit, which was a short-term effect due to limited availability of smartphones in the market.
Briefing about directors & key managerial personnel
The Union budget 2021 has been a bold one,
where the government has increased its expenses without increasing the tax
rates. Till now, the investors have welcomed the budget with open arms and it
may continue to have a strong positive impact on the equity markets for FY
’21-’22 due to increase in liquidity, especially for some sectors including
Infrastructure and affiliated sectors, Railways, Financial, and Capital Goods.
Auto and Pharma sectors can boost from the scrappage policy introduced in the
budget, and Consumer Goods (Electronic) sector can gain from the higher customs
duty levied on imports. In short term, the equity markets might witness a
correction, but for the year, the budget looks to be fruitful for equities, and
in turn, for the country’s economy as well.
Impact on Commodity Market
In the Union Budget 2021, the FM has not
announced any changes in the commodities transaction tax. However, there has
been some changes in the custom duty on some commodities, which might affect
the commodity market. Base customs duty on gold and silver has been reduced
from 12.5% to 7.5%, but they will attract agriculture Infrastructure and
development cess so the net rate levied comes around 10.75%. The budget has no
impact on crude oil. As for iron and steel, Customs duty has been reduced to 7.5%
from 10% earlier on semis, flat, and long products of non-alloy, alloy, and stainless
steels.
In Friday’s trading session, Bank Nifty gained 1.00%, with PSU Banks an Private Banks gaining 0.26% and 0.96% respectively.
We expect intraday range could be 35,587-36,609 with sideways to negative momentum & broader range could be expected between 35,302 to 36,914 zone for this week.
Nifty Intraday Outlook
In Friday’s trading session, Nifty almost flat inclined towards a negative zone, despite witnessing a highly volatile trading session.
We expect intraday range could be 14,958-15,364 with sideways to negative momentum while broader range could be 14,813 to 15,527
Nureca Limited is engaged in home healthcare and wellness products, and is all set to hit the primary market, with a goal of raising INR 100 crores, which is 100% fresh issue.
The issue includes a reservation of up to INR 5,00,000 worth of equity shares (1,250 equity shares) for subscription by eligible employees
Issue Details
Strengths
Diversified product portfolio across home healthcare industry
Well-recognized brand with a targeted marketing strategy
Wide sales and distribution network
Experienced promoters with strong management team
Proven track record of robust financial performance
Valuation
The company reported
its EPS at 9.45 for the year ending March 2020, bringing the IPO valuation to a
P/E of 42.3 at upper price band, against sector PE of 50.56.
We recommend to apply
for the issue on the basis of its strong financials and high prospects of the
industry growth.
ISSUE BREAK-UP
Utilization of Funds
Background highlights of the company in brief
Nureca Ltd. is a B2C company engaged in the business of home healthcare and wellness products
Orthopedic Products (wheelchairs, walkers, lumbar and tailbone supports, and physiotherapy electric massagers)
Mother and Child Products (breast pumps, bottle sterilizers, bottle warmers, car seats and baby carry cots)
Nutrition Supplements (fish oil, multivitamins, probiotics, biotin, apple cider and vinegar)
Lifestyle Products (smart scales, aroma diffusers and fitness tracker)
The company markets and sells its products across India through its own website i.e. drtrust.in and third party e-commerce platforms, distributors and retailers. It also undertakes direct promotional initiatives like advertising our products through digital marketing.
During the lockdown, the company’s business and operations have continued to run effectively due to the general awareness about the healthcare products in which the company operates pursuant to COVID-19.
Though the business has been affected during the initial days of lockdown, the company has not faced any material impact on its business.
During the period after June 30, 2020, two companies namely, Nureca Technologies Private Limited and Nureca Healthcare Private Limited were incorporated as wholly owned subsidiaries of Nureca.
The company’s revenue from operations on a consolidated basis was INR 99.43 Crs, INR 61.89 Crs and INR 20.05 Crs for Fiscal 2020, 2019 and 2018, respectively. For the six months period ended September 30, 2020 it was INR 122.14 Crs.
The company’s revenue and profit margins are directly impacted by its sales volume of its products and by demand of the same. Majority of the revenue from operations is from sales of the company’s healthcare products.
Briefing about directors & key managerial personnel
During the current week, Nifty witnessed a highly volatile session, after breaking the trend line support at 15,160, after touching the high levels of 15,250 on the same day. It made the lows of 14,977, trading below 15,000 mark during the week. Sensex neared 52,000, touching 51,780 and it fell to 51,314 on the same day, witnessing a movement of around 466 points.
The market touched the high levels as it
countersigned fund inflows from FIIs and FPIs. Better than expected quarterly
result season also aided in uplifting the investors’ sentiments in the equity
market. All the banking stocks have been continuing their uptrend, since a day
before the RBI policy was announced, where, the RBI kept the rates unchanged as
a plan to infuse liquidity in the market in order to revive the country’s
economy from the adverse effect of COVID-19. However, the markets dipped as the
investors started booking the profits, after the markets touched high levels.
The volatility in the market has been
contributed by major global economic events such as US’ CPI inflation at part
with the market expectations, better than expected crude oil inventory numbers,
unemployment claims and Factory Orders, Eurozone’s and UK’s Final Services PMI
and PPI, which supported the uptrend. Whereas, lower than expected UK’s
construction PMI numbers, Eurozone’s Retail Sales, US’ Non-Farm Employment
Change weighed on the equity markets.
As far as sectoral indices Nifty PSU Bank has
gained as more as 8.3% in past 6 trading sessions, Nifty Metal has gained 5.0%,
Nifty Realty gained 4.7%, Nifty Energy, Nifty Financial Services and Nifty Auto
gained more than 2.5%, Nifty Pharma and Nifty FMCG gained more than 1.5% during
the same period. Whereas, Nifty Media lost 3.3% during the same period.
For the upcoming week, 15,250 will be an
important level to keep an eye at. We expect Nifty to be in the range of 15,000
– 14,882 – 14,800 to 15,250 – 15,285 – 15,380 for the week, whereas, we expect
Bank Nifty to be in the range of 35,400 – 35,013 – 34,599 to 36,197 – 36,612 –
36,996.
In yesterday’s trading session, Bank Nifty lost 0.76%, with PSU Banks gaining 0.14% and Private Banks losing 0.72%.
We expect intraday range could be 35,314-36,202 with sideways to negative momentum & broader range could be expected between 35,007 to 36,499 zone for this week.
Nifty Intraday Outlook
In yesterday’s trading session, Nifty closed higher, snapping its 2 days losing streak.
We expect intraday range could be 14,978-15,373 with sideways to negative momentum while broader range could be 14,837 to 15,521.
In yesterday’s trading session, Bank Nifty lost 0.76%, with PSU Banks gaining 0.14% and Private Banks losing 0.72%.
We expect intraday range could be 35,237-36,283 with sideways to negative momentum & broader range could be expected between 34,939 to 36,584 zone for this week.
Nifty Intraday Outlook
In yesterday’s trading session, Nifty closed at par, after witnessing a highly volatile session, when it went below 15,000 as the investors booked profits.
We expect intraday range could be 14,856-15,364 with sideways to negative momentum while broader range could be 14,707 to 15,519.
