(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:
- Bajaj Housing listing
- QIPs on the rise
- Textile firms’ margins
Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai. All eyes are on the Fed’s interest rate decision this week, as traders have renewed expectations for a potential half-point rate cut. The prospect of an aggressive move by the central bank is already driving flows into emerging markets, including India. Foreign investor purchases have resumed, pushing the Nifty to a new all-time high last week. This upbeat sentiment is expected to extend to Bajaj Housing Finance, which makes its highly anticipated market debut today.
Bajaj Housing IPO may bring mega gains for investors
The most-awaited listing of the year is shaping up to be a blockbuster, going by the buzz among traders and the success of recent IPOs. Bajaj Housing Finance’s offering drew stellar demand from both institutional and retail investors. Traders are estimating a premium of 75-77 rupees over the offering price of 70 rupees, signaling a potential first-day pop of over 100%. This shows investors’ continued appetite for Indian equities, following Tata Technologies’ impressive 160% surge in November, which marked the best debut for a major Indian IPO.
QIPs on the rise as stocks make new highs
Qualified institutional placements are on the rise in the country’s bustling capital markets. In August, 11 companies raised nearly $1.3 billion selling shares to institutions, marking the highest number of deals in several years, according to data from primeinfobase.in. September is looking similarly busy, with companies such as Sona BLW and Mrs. Bector Food already tapping into this route, and many more expected to follow, according to local media reports.
Textile makers set for gains on cotton supply surge
Textile companies like Welspun Living, Nitin Spinners and Vardhman Textiles are set to benefit from the surge in India’s cotton production for the sowing year that began Oct. 1. According to an industry body, India’s cotton supply is expected to surpass demand, which should provide a key advantage for manufactures. While global cotton prices have been easing since February, higher production in the South Asian nation is likely to drive them down further, likely boosting margins for textile producers.
Analysts actions:
- KIMS Hospitals Rated New Buy at HSBC; PT 3,300 rupees
- Godrej Agrovet Raised to Buy at Motilal Oswal Securities
- Persistent Systems Cut to Add at HDFC Securities
Three great reads from Bloomberg today:
- Softbank-Backed Swiggy Said to Eye India IPO Filing This Week
- China’s Deepening Slowdown Tests Xi’s Tolerance for Growth Miss
- Deciphering the Fed’s Next Move With Soft Landing at Stake
And, finally..
Foreigners are returning to local equities after being net sellers for most of the year. India’s booming stock market has attracted a net inflow of $3.1 billion so far in September, the fourth straight month of FPI buying. This surge is driven by growing wagers on lower global interest rates, which are boosting flows into emerging markets. MSCI’s gauge of Indian shares is up 24% in 2024, in contrast to a 1.7% drop in a similar gauge of Chinese stocks.
--With assistance from Alex Gabriel Simon.
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