SENSEX on Monday crossed 75,000 Mark for the first time. Post COVID markets are continuously in a bull run.
Let's look what where the key news this week - WII 2
400+ Not Out
The market capitalization of BSE-listed companies crossed Rs 400 lakh crore on April 8, 2024, adding a little over Rs 100 lakh crore in the last nine months.
This surge was driven by a resilient domestic economy, improved high-frequency indicators, strong corporate earnings, positive investor sentiment, and domestic and international inflows.
The mid and small cap indices saw a surge of 60% and 63% respectively, outpacing the 28.6% rise in the Largecap Sensex index.
The leading sectors included Realty, PSU banks, Auto, Energy, Infra and Pharma. Anticipating political stability post Lok Sabha Elections 2024, the economy gears up for increased focus on infrastructure, capex, and manufacturing.
This milestone is a witness to the robust growth potential of India's capital markets, which are primed for prosperity in the coming years.
A remarkable journey has been marked by this significant milestone:
November 2014: ₹100 lakh crore
February 2021: ₹200 lakh crore
July 2023: ₹300 lakh crore
Present: Crossing the ₹400 lakh crore threshold.
The Nifty Microcap 250 index has rallied nearly 93%, Nifty Smallcap100 80%, and Nifty Midcap100 66%.
Central bank rate actions, the outcome of the Lok Sabha elections, the US presidential election, and the earnings season are expected to be major triggers for stock prices going forward.
The Indian capital markets have seen vibrant participation from domestic retail savers, with demat accounts surging to 151 million in March 2024 from 36 million in March 2019.
India Inc. has raised $92.9 billion through primary markets over the last five years, and India's GDP is likely to exceed $4 trillion in FY25/26 and $8 trillion by FY34.
Normal is Good
The weather forecasting agency Skymet has predicted that India is likely to experience a normal monsoon in 2024, which is expected to be 102% of the long-period average of 868.6 mm for the four-month period. The prediction of a good monsoon is crucial as the southwest monsoon provides around 70% of India's yearly rainfall, supporting over half of its 1.4 billion population and contributing around 14% to the country's GDP.
This forecast brings hope for agricultural activities that heavily rely on these rains for irrigation. India's farmland, which lacks irrigation cover, depends on the monsoon rains to cultivate crops like rice, corn, cane, cotton, and soybeans. The normal monsoon prediction can lead to improved agricultural productivity, higher crop yields, and overall economic growth in the agricultural sector.
The Indian Meteorological Department (IMD) had earlier predicted countrywide precipitation worth 90% of the seasonal average, translating to 78.3 cm of rainfall, which was below the long-term average.
The Indian agricultural sector has a low labor productivity of about one-sixth the level of other sectors of the economy, which the Organisation for Economic Co-operation and Development (OECD) has identified as a major factor contributing to low living standards and poverty in rural areas.
Although overall poverty has declined nationwide, more than one-third of the population, mostly rural Indians, still live on less than $1 per day. This persistent poverty is a major factor driving government agricultural policy. The Indian constitution provides the states with primary authority over the agricultural sector, while the central government develops overarching policies and regulatory guidelines.
India's agricultural domestic and trade policy aims to achieve food security, food self-sufficiency, and income support for farmers.
In summary, Skymet's prediction of a normal monsoon in India for 2024 brings hope for agricultural activities and improved productivity in the agricultural sector, which is crucial for food security and poverty reduction in the country.
Ordering Valuations through Swiggy
The increase in valuation of Swiggy, a food delivery service company, ahead of its Initial Public Offering (IPO). Invesco, a global investment management company, has raised the valuation of Swiggy for the third consecutive time from $12.7 billion to $18.5 billion. This increase represents a 49% rise since October 2023 and a 19% increase since January 2022, as per the research desk. Invesco holds a nearly 2% stake in Swiggy, which also operates a Quick Commerce business, Swiggy Instamart. The increase in valuation comes as Swiggy plans to launch its Rs 8300 crore public issue this year.
The company's revenue for the nine months of the FY24 stood at Rs 5476 crores, while its loss narrowed to Rs 1600 crore during the period from the earlier Rs 4179 crore in FY23.
Swiggy is offering a 20% discount to High-Net-Worth Individuals (HNIs) in a pre-IPO deal. The company's appointed wealth managers are offering shares at ₹350 a piece and at a valuation of ₹80,000 crore. Swiggy is also launching a 'Lite' plan, bundling for One programme to take on Zomato Gold.
Swiggy has also been experimenting with increasing its platform fee to Rs 10 per order ahead of its much-awaited IPO. The company is looking to reduce its losses ahead of the IPO, which is expected to be issued in the next couple of months. However, a Swiggy spokesperson said that the company "has no plans for a significant increase" of the platform fees in the near future.
Swiggy is also exploring a secondary market deal as it wants to offer exits to its early as well as late-stage backers. The company is likely to go for an IPO in the second half of this year and the secondary transaction appears to be an attempt to enhance its cap table.
SIP out of Payslip Growing
The Systematic Investment Plan (SIP) contribution in March 2024 surged to an unmatched scale, reaching Rs 19,270.96 crores. This remarkable increase signifies a growing investor interest and confidence in mutual funds as a preferred investment avenue.
March 2024 saw a substantial increase of new SIP registrations, with 42,87,117 new SIP accounts being added. This surge in new registrations indicates a broader participation of investors in the mutual fund market.
The mutual fund folios and retail mutual fund folios also reached all-time highs in March 2024, reflecting a strong expansion path in the mutual fund industry. This milestone underscores the increasing popularity and acceptance of mutual funds among retail investor.
The Assets Under Management (AUM) for Equity + Hybrid + Targeted investment plans among retail investors stood at Rs 31,20,006 crores in March 2024.
The number of SIP accounts hit a record high of 8,39,71,299 in March 2024, showcasing investors' commitment to disciplined and regular investment practices. This surge in SIP accounts reflects a positive trend towards systematic wealth accumulation and long-term financial planning.
The upward trend in SIP contributions and mutual fund investments signifies a dynamic financial environment with increasing investor awareness and confidence in the mutual fund industry. This positive growth outlook for the overall development and sustainability of the mutual fund market, offering investors a reliable avenue for wealth creation and financial growth.
Booming Fundraising
InvITs, REITs raise record Rs 17,116 cr in FY24 on promising returns.
In the fiscal year 2023-24, fundraising through Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) reached a record Rs 17,116 crore, marking a 14-fold increase, representing a significant increase from the previous year's fundraising of Rs 1,214 crore compared to the previous year. This surge in fundraising is attributed to growing investor interest in these investment vehicles, which have gained popularity due to their high- yield returns and capital appreciation.
InvITs typically consist of infrastructure assets like highways, while REITs comprise leased commercial real estate assets. Both investment vehicles have experienced significant growth since their introduction in 2014, with the first investment trust registered with the Securities and Exchange Board of India (SEBI) in 2016-17.
Industry experts express optimism about the outlook for InvITs and REITs in the current fiscal year FY25, quoting regulatory amendments and a strong infrastructure development pipeline. Efforts to educate investors about the benefits of investing in these vehicles, such as assured returns and visibility of cash flows, have contributed to their growing popularity.
The fundraising surge in FY24 is a evidence to the growing interest in InvITs and REITs, with investors recognizing the potential for attractive returns and capital appreciation. The trend is expected to continue in the coming years, with further growth anticipated in these investment vehicles.
Quick view through the week
TCS FY24 - Q4 results
Net profit rises 9% to Rs 12,434 crore; Revenue rose 3.5% to Rs 61,237 crore; Declares final dividend of Rs 28 per share.
Bharti Hexacom lists at 755₹/Share a premium of 32% over it's issue price. Market capitalisation standing at 40,000 crores.
US markets tumble as rate cut hopes get delayed, S&P 500 down 1%; GIFT Nifty falls
Vodafone Idea Announces Rs 18,000 Crore FPO Opening on April 18, Floor Price Set at Rs 10 per Share.
InterGlobe Aviation Hits Record High on April 10, Trading 5% Higher at Rs 3,801 , Becomes World's Third Largest Airline by Market Cap.
OPEC projects India's oil demand to surge by 228 thousand barrels per day in 2024, driven by diesel, as per its report on April 11.
Happy Investing😊
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