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Retail Inflation Falls to 4-Month Low in October – Top Indian Market Updates

Consumer Price Index

Here are some of the major updates that could move the markets on Wednesday:

India’s retail inflation falls to 4-month low of 4.87% in October

India’s retail inflation, measured by the Consumer Price Index (CPI), declined to a four-month low of 4.87% in October. CPI stood at 5.02% in September 2023. The consumer food price index (CFPI) remained stable at 6.61% last month, a marginal decline from 6.62% recorded in September. RBI has projected 5.6% inflation for the October-December quarter.

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Manappuram Finance Q2 Results: Net Profit rises 20% YoY to ₹420 crore

Manappuram Finance Ltd reported a 20% YoY rise in net profit to ₹420 crore in the quarter ended September (Q2 FY24). The company’s total income stood at ₹1,456 crore, up 17% YoY. The interest income stood at ₹1,405 crore, up 13.4%YoY. Its finance costs grew 21% YoY to ₹443 crore. The company’s board declared a dividend of ₹0.85 per equity share.

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ONGC to start oil production from $5 billion deep-water project this month

Oil and Natural Gas Corporation (ONGC) is set to commence oil production from its Cluster-2 project in the Krishna Godavari basin in the Bay of Bengal. The floating production unit (FPSO), Armada Sterling-V, is already in the block. ONGC plans to gradually ramp up production, starting with 3 to 4 wells initially. Oil production from Cluster-2 should have begun by November 2021 but was delayed due to the pandemic.

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India’s coal import rose 4% in September

India’s coal import increased by 4.3% YoY to 20.61 million tonnes (MT) in September. Non-coking coal imports stood at 13.89 MT, against 12.08 MT imported in September last financial year. Coking coal imports dropped to 4.59 MT from 4.88 MT imported in September FY23.

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GAIL conducts world’s first ship-to-ship LNG transfer

GAIL (India) Ltd has conducted the world’s first ship-to-ship liquefied natural gas (LNG) transfer to reduce shipping costs and cut emissions. The company, which has contracted 5.8 million tonnes per annum (MTPA) of LNG from the US, implemented an innovative contractual arrangement to optimize vessel paths, resulting in a significant reduction in CO2 emissions.

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Patel family to acquire additional 1% stake in GMM Pfaudler

The Patel family, promoter of engineering firm GMM Pfaudler, is set to acquire an additional 1% stake in the company in a strategic transfer. The family will now own a 25.18% stake in GMM Pfaudler. The deal involves the purchase of 4.49 lakh equity shares from Pfaudler Inc. at ₹1,700 per share. The transaction is being done through Millars Machinery, a key entity within the promoter group.

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Tata Steel to scrap 800 jobs in the Netherlands

Tata Steel has revealed plans to eliminate 800 jobs at its plant in the Netherlands, located in IJmuiden near Amsterdam. The decision is aimed at enhancing market conditions and reducing costs for the under-pressure plant. The cuts will affect some 500 full-time workers, mainly in management, staff and support functions, while another 300 temporary jobs are also to disappear.

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Adani Electricity used renewable sources to supply power to Mumbai on Diwali

Adani Electricity relied completely on renewable sources for the supply of power to Mumbai for four hours on Diwali day. The company supplied 1,200 MW of power from renewable sources to its 3 million subscribers between 10 AM and 2 PM, meaning that over 40% of Mumbai’s power needs were derived from renewable energy.

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Market News Top 10 News

Jio Fin Services to be Excluded From NSE Indices – Top Indian Market Updates

Here are some of the major updates that could move the markets tomorrow:

Jio Financial Services to be excluded from NSE indices from Sept 7

NSE Indices is set to remove Jio Financial Services Ltd (JFSL) from its Nifty indices. This move comes after JSFL stock failed to meet the price band criteria on two consecutive trading days. The exclusion from the NSE indices, including Nifty 50, Nifty 100, Nifty 200, Nifty 500, and others will become effective from September 7, 2023. JFSL’s inclusion in various NSE indices was announced earlier in July 2023 due to the demerger of the financial services business from Reliance Industries Ltd. 

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Instant settlement of Indian stock market trades to come in by October 2024

According to a Reuters report, the Securities and Exchange Board of India (SEBI) expects instant settlement of stock market trades to be implemented by October 2024. Currently, trades in India are settled in “T+1” or one day after the trades are initiated. Instant settlement would ensure trades are settled immediately. To start, SEBI would implement settlement within one hour of the trade, with instant settlement coming some months later.

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Andhra Pradesh govt, SBI sign deal to establish 7,500 micro food processing units

State Bank of India (SBI) and the Andhra Pradesh Food Processing Society (APFPS) have entered into an agreement to upgrade and support the establishment of at least 7,500 micro food processing units in the state. This agreement will be executed in the ongoing financial year (FY24) under the Prime Minister Formalisation of Micro Food Processing Enterprises (PMFME) scheme. SBI has already sanctioned over 500 loans under the PMFME scheme in FY23..

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Bain approaches Dr Reddy’s Labs for joint Cipla bid

Bain Capital has approached Dr Reddy’s Laboratories (DRL) to explore a joint bid to buy out the promoters of Cipla Ltd, the Hamied family. Last week, senior leadership from both sides met along with their advisors to discuss and formulate a strategy. DRL is believed to be evaluating the opportunity and countering the offer by Torrent Pharma, which is currently the sole Indian strategic investor who has bid for the promoter stake.

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M&M signs sponsorship deal with Disney Star for ICC WC

Mahindra & Mahindra (M&M) has signed a sponsorship deal with Disney Star for the upcoming ICC Cricket World Cup 2023. The World Cup will be played in India from October 5 to November 19. The association marks Mahindra’s most significant foray into sports sponsorships. As part of the deal, M&M has become the associate sponsor of Star Sports and a co-sponsor on the digital platform Disney+ Hotstar.

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CBI arrests GAIL’s Executive Director and four others in bribery case

The Central Bureau of Investigation (CBI) has arrested five people, including GAIL Executive Director KB Singh, in connection with an alleged bribery of ₹50 lakh. The agency is conducting searches at Delhi, Noida, Uttar Pradesh and Visakhapatnam. CBI alleged that Singh had demanded the bribe in exchange for favours in a GAIL project. GAIL is India’s leading natural gas transmission and marketing company.

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Cipla acquires Actor Pharma for $49 million

Cipla is set to acquire Actor Pharma with a view to expand its footprint in the South African market. Actor Pharma is a privately owned consumer health and generic medicine company. The acquisition will take place at a cost of ZAR900 million or $48.6 million. The transaction was executed through Cipla’s wholly-owned subsidiary in South Africa. The company signed a binding term-sheet with Actor Holdings to acquire 100% of the issued ordinary shares of Actor Pharma.

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NBCC gets order worth Rs 2,000 crore from Kerala State Housing Board

National Buildings Construction Corporation Ltd (NBCC) has received an order worth ₹2,000 crore from the Kerala State Housing Board (KSBH). The project entails the development of 17.9 acres of land parcel of Kerala State Housing Board at Marine Drive, Kochi, Kerala. The time period for the order execution is yet to be decided. 

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Market News Top 10 News

India’s Manufacturing PMI Falls to Lowest in Seven Months – Top Indian Market News

India’s manufacturing PMI declines to 7-month low of 55.4 in March

India’s factory activity grew at its weakest pace in seven months in March, as renewed lockdowns to curtail an increase in Covid-19 cases dampened domestic demand and output. The IHS Markit Purchasing Managers’ Index (PMI) for India’s manufacturing sector declined to 55.4 in March from 57.5 in February. PMI is a month-on-month calculation, and a value of more than 50 represents an expansion when compared to the previous month.

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Adani Ports to acquire remaining 25% stake in Krishnapatnam Port

Adani Ports & Special Economic Zone Ltd (APSEZ) will acquire a 25% stake of Vishwa Samudra Holding in Krishnapatnam Port for Rs 2,800 crore. The company currently holds a 75% stake in Krishnapatnam Port. With this latest acquisition, the port will become a wholly-owned subsidiary of APSEZ. The transaction is expected to be completed within three months. Krishnapatnam Port is located in the Nellore district of Andhra Pradesh. It is an all-weather, deep-water port, with a current capacity of 64 million tonnes per annum (MTPA).

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Panacea Biotec to make 100 million doses of Sputnik V vaccine

Panacea Biotec Limited has signed an agreement with the Russian Direct Investment Fund (RDIF) for manufacturing 100 million doses of Sputnik V vaccine every year. According to a study conducted by The Lancet, Sputnik V showed an efficacy rate of 91.6%. The production of the vaccine at Panacea Biotec’s manufacturing units will help facilitate its global supply to the international partners of RDIF.

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Indian Oil Corp buys its first Johan Sverdrup crude cargoes: Report

As per a report from Reuters, Indian Oil Corporation (IOC) has bought 4 million barrels of  Norway’s Johan Sverdrup crude for the first time via a tender. IOC is looking to speed up the diversification of crude imports. The report states that IOC will take delivery of 2 million barrels each of the North Sea crude in May and June. The move follows the government’s call to cut dependence on crude from the Middle East due to the standoff between India and the world’s largest crude importer— Saudi Arabia.

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Tech Mahindra to launch blockchain solution for BFSI clients

Tech Mahindra Ltd has partnered with Netherlands-based Quantoz to launch a ‘stablecoin-as-a-service’ blockchain solution for global banks and financial institutions. Quantoz is a leading blockchain application incubator. Tech Mahindra will help customers integrate Quantoz’ NEXUS platform into their legacy infrastructure. This will enable automated token, crypto, and fiat transaction processing for a variety of banking and payment functions.

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Bharti Airtel partners with Apollo 24/7 to offer e-healthcare services

Bharti Airtel has partnered with Apollo 24/7 to offer a wide range of e-healthcare services to its customers as part of their exclusive ‘Thanks’ benefits. Under the partnership, Airtel Platinum and Gold customers will get complimentary membership to the Apollo Circle. This will include virtual consultation with top doctors and specialists from Apollo, as well as online test booking facilities. It will also offer home sample collection facilities and home delivery of medicines with cashback benefits.

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HDFC Bank Q4 advances grow 14% Rs 11,32,000 crore

HDFC Bank said its advances aggregated to approximately Rs 11,32,000 crore as of March 31, 2021 (Q4 FY21). This is a growth of 13.9% over Rs 9,93,700 crore as of March 31, 2020. Deposits grew by 16.3% YoY to Rs 13,35,000 crore in Q4. Domestic retail loans were up by 7.5% YoY, and domestic wholesale loans increased by 21% YoY during the same period.

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Marico expects to deliver low double-digit bottomline growth in Q4

Marico Limited said it expects low double-digit bottomline growth in the fourth quarter of the financial year 2020-21, after being impacted by the Covid-19 pandemic. The FMCG firm has witnessed healthy momentum building across its key portfolios. The company said it expects its operating margin to fall in Q4 due to input cost pressures. In Q4 FY21, the fast-moving consumer goods (FMCG) sector continued to exhibit improving demand trends as quarterly economic growth has moved into positive territory and the Covid-19 vaccination rollout gathered pace.

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GAIL India to invest in startups through ‘Pankh’

GAIL (India) Limited has launched a new initiative— ‘Pankh’, which aims to support startups in identified focus areas. The company has opened a fresh round for solicitation of investment proposals from startups that operate in natural gas, petrochemicals, energy, project management, bio-manure marketing, nano-materials, IoT, data mining, environment, and healthcare. The Solicitation Round will be open till May 30, 2021.

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Ircon International’s board approves bonus issue of 1:1

The Board of Directors of Ircon International has approved the issuance of bonus shares in the ratio 1:1. A 1:1 bonus issue means that exiting shareholders will receive one additional share for each share held in the firm. The record date for the bonus share issue is yet to be announced. State-owned Ircon International is an engineering and construction company specialized in transport infrastructure.

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Editorial

Government’s Boost for Natural Gas in India

India is currently the third-largest energy consumer in the world. Our country is highly dependent on oil and natural gas for its further development and growth. Around 58% of the total energy consumed in India comes from coal, while petroleum and other liquids make up 26% of the energy basket. Unfortunately, the share of natural gas is just 6%, while that of renewables is less than 2%. To ensure sustainable growth, it is high time that our country shifts its focus to greener energy sources. 

Recently, PM Modi announced huge plans to boost the supply of natural gas in India. Over the next decade, we would be able to witness significant changes in our consumption of this clean fossil fuel. Let us understand how the government proposes to achieve its targets. Let us also take a look at a few listed firms that could benefit from these expansion plans.

PM Modi’s Announcement

On January 5, 2021, Prime Minister Narendra Modi announced that the share of natural gas in India’s energy basket will be more than doubled. He stated that energy sources will be diversified, and the nation will be connected with one major gas pipeline grid. Work is in progress to set up 16,000 kilometres of a new gas pipeline, which will be completed over the next 5-6 years. This would help in providing affordable fuel to millions of people, as well as vital industries. The new line would provide the foundation for 700 compressed natural gas (CNG) stations. 

PM Modi stated that the share of natural gas is targeted to be raised to 15% by 2030. The government plans to spend around $60 billion (~Rs 4.4 lakh crore) to create and improve gas infrastructure throughout India. This includes new pipeline projects, liquefied natural gas (LNG) terminals, and city gas distribution (CGD) networks.

On the date of the announcement, the Prime Minister was inaugurating the 450-km long natural gas pipeline between Kochi and Mangaluru. This new line will help take the fuel to industries such as petrochemical plants and fertiliser units. It will also provide fuel for city gas projects for supply of CNG to automobiles and piped cooking gas to households in cities along the route. The pipeline has a design capacity of 12 million standard cubic meters per day. The cost of this project was around Rs 3,000 crore.

Listed Companies in Focus

As mentioned above, the demand for natural gas in India will get a major boost from the government’s plan to establish a large pipeline network. The sale of piped natural gas (PNG) for cooking and compressed natural gas (CNG) for fueling vehicles will grow rapidly in the years to come. India has prominent listed companies that distribute natural gas to end-consumers. Let us take a look at a few of these: 

GAIL (India) Ltd

GAIL (India) Limited is the largest state-owned natural gas processing and distribution company in India. The public sector undertaking (PSU) comes under the administrative control of the Ministry of Petroleum and Natural Gas. The company was incorporated in 1984 and was initially known as the Gas Authority of India Limited. Over the years, they have strategically expanded and diversified into various allied activities. 

Currently, the main business segments of GAIL include natural gas, liquefied petroleum gas (LPG) transmission, petrochemical city gas distribution, exploration & production, and electricity production. The company has constructed some of the largest natural gas pipeline projects and has also developed city gas distribution networks throughout India. It has an existing gas pipeline network of over 12,500 km, which has a capacity of 204 Million Metric Standard Cubic Meter Per Day (MMSCMD). GAIL’s existing natural gas pipeline network covers 18 States.

Indraprastha Gas

Incorporated in 1998, Indraprastha Gas Ltd (IGL) took over Delhi City Gas Distribution Project from GAIL in 1999. The company has established a strong distribution network of natural gas in the National Capital Region (NCR) of Delhi. It distributes the essential clean fossil fuel to consumers in the domestic, transport, and commercial sectors. IGL gave out a record 2.72 lakh new connections for piped cooking gas (PNG) to household kitchens during the financial year 2019-20. It supplies PNG to nearly 14 lakh households. The company also has a network of 557 CNG stations. It sells CNG to over 11.5 lakh vehicles in NCR through this network.

Adani Total Gas

Adani Total Gas Ltd develops city gas distribution (CGD) networks to supply PNG to the industrial, commercial, domestic (residential) sectors. It also distributes CNG to the transport sector. The company has strategically set up CGD networks in Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana, and Khurja in Uttar Pradesh. In November 2020, the company signed a definitive agreement for the acquisition of the business undertaking of city gas distribution and retail sale of CNG in the areas of Jalandhar, Ludhiana, and Kutch (East). 

Adani Gas supplies PNG to approximately 4.4 lakh customers through a connected pipeline network of approximately 7,600 km. The company also has over 115 CNG filling stations. 

Gujarat Gas

Gujarat Gas Ltd also engages in the distribution of city natural gas in India. The company operates a network of approximately 24,400 kilometers of gas pipeline and 403 CNG stations. It supplies natural gas to approximately 14.4 lakh residential consumers and 12,600 commercial customers. It operates in 21 districts of Gujarat, 7 districts of Punjab, and 5 districts of Madhya Pradesh. Gujarat Gas also has a significant presence in Rajasthan, Maharashtra, and Haryana.

Conclusion

Historically, we have seen that these companies often receive contracts from the Centre and state governments to develop natural gas distribution networks. With the announcement of such a large initiative, we could see these companies reporting a higher increase in their revenue growth. The households and industries that are located within the vicinity of the proposed natural gas pipeline projects would be able to obtain the required fuel at cheap rates. Also, we may see the use of natural gas benefiting to reduce pollution levels in the country. Compared to renewable energy sources like solar and wind, natural gas is much cheaper, which may benefit a country like India.

Within 2030, petrol will be doped with as much as 20% of ethanol extracted from sugarcane and other agro products. [Companies such as EID Parry, Uttam Sugar Mills, and Balrampur Chini Mills could benefit from this]. On the other hand, the construction of the world’s biggest hybrid renewable plant (that combines wind and solar power) has started in Gujarat. The manufacturing of biofuels and electric mobility will also be given greater importance. All these projects would help our country to become self-sufficient in meeting energy needs. India will also be able to significantly cut down its carbon emissions. Let us look forward to seeing how India implements this huge task.

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Editorial

Why are ONGC and GAIL Share Prices Going up?

The stock of GAIL Limited had been on the top gainers’ list for two consecutive days. From December 1st, its share price has jumped more than 12% and has closed at Rs 118.25 on December 3. A very similar surge was also seen in ONGC’s stock price.  It was mentioned that we will be bringing you a detailed analysis as to why such a rally has occurred. marketfeed always delivers on its promises. So, let us dive deep into the specific details regarding this particular stock. 

What Led to a Surge in GAIL and ONGC share price?

The reason for the rally is very interesting and it can be traced back to a PNGRB update that came out on 27 November 2020. The Petroleum and Natural Gas Regulatory Board (PNGRB) is a statutory body of the Indian government. The main aim of this board is to protect the interests of consumers and entities that are engaged in specified activities related to petroleum, petroleum products, and natural gas. They also have the power to regulate the refining, processing, storing, transportation, distribution, and sale of important resources mentioned above.

PNGRB, on 27 November, released a notification regarding a unified tariff structure for over a dozen pipelines that form the National Gas Grid. Currently, the tariff for natural gas is levied in proportion to the distance between the source and the consumers. The longer the distance, the higher will be the charges. The consumers who are away from the coast had to pay a very high charge.

The regulator has now notified a two-zone tariff structure: Zone-I will be 300-km from the source of gas (gas field or LNG import terminal) and Zone-II will be beyond that. This would lead to a 20-30% rise in transportation charges paid by users near the source (Zone-I). There will be a reduction in charges for consumers that are away from the source and will make it more affordable for them. Another major objective of this plan is to attract more investments for improving the gas infrastructure in India. 

GAIL has a network of seven pipelines in the National Gas Grid. And, the major highlight is that most of them fall under Zone-I. The pipelines that will be part of the unified tariff plan include GAIL India’s Hazira-Vijaipur-Jagdishpur (HVJ) and its supplementary Dahej-Vijaipur line. It also includes the Dahej (in Gujarat) to Uran-Dabhol-Panvel (in Maharashtra) pipeline. Many industries and consumer entities that fall closer to such a source of pipelines will have to pay a higher tariff. 

The pipelines of other companies such as the Oil and Natural Gas Corporation Ltd (ONGC), Gujarat State Petroleum Corporation (GSPL), Indian Oil Corporation (IOC), are included in the latest unified tariff structure. Reliance Industries’ subsidiary which operates pipelines in Madhya Pradesh and Uttar Pradesh are also included in PNGRB’s plan. Unified tariffs will encourage gas transmission companies to set up new pipelines and will result in long term volume growth. This has led to positive sentiments surrounding the stock of GAIL and ONGC. 

Graph showing the surge in GAIL’s stock price since December 1, 2020

You can check out the similar surge in ONGC’s share price, as well.

Conclusion

This particular rally of GAIL’s share price was something that we had been wondering about for the past 2 days. Such stock-specific movements are sometimes difficult to understand and comprehend. We were also able to see ONGC up on the top gainers’ list multiple times. And now, we have finally gotten an answer. However, do bear in mind that this could only be a part of the surge in its shares. There could always be a multitude of other factors that affect the stock prices of a company.

The new tariff structure is part of the government’s plan to raise the share of gas in India’s energy mix to 15% from the current level of about 6.3%. Thus, we will be able to cut down India’s carbon footprint by 2030. This is a wonderful initiative to ensure that our future economic growth is secure. Always remember to follow such specific news. At the same time, ensure that you understand how it could affect the stock prices.