By MAHAVIR LUNAWAT
R K SWAMY, JG Chemicals and Gopal Snacks are scheduled to hit the street to raise INR 1,324 crores.
The Indian market continued consolidation of last 8 to 9 weeks. It’s trading in the range of 22200 and 21000 levels on Nifty. HSBC Private Sector Manufacturing, service & composite PMI came out strongly for the month of February, signalling robust growth indicating inherent strengths of the Indian economy.
As per Minutes February RBI monetary Policy review, “Food price uncertainty remains a major source of volatility for headline inflation outlook. Growing geo-political tensions and supply chain disruptions due to new flash points also pose further risks to the inflation outlook”.
It also emphasized the importance of staying focused on achieving the 4% inflation target. As per India Ratings and Research estimates the Indian GDP growth for FY25 to be at 6.5%. India’s Forex reserve stood at $617 bn in second week of February.
In the Indian auto sector, tractor sales have seen a 4% decline in the first nine months of the fiscal year, primarily due to erratic weather conditions and an uneven monsoon impacting agricultural output and farm income. Despite this, the passenger vehicle segment is anticipated to grow by 5-7% in the next fiscal year, with a significant contribution from the SUV segment, which has seen its market share double to 60% this fiscal.
The increase in demand for SUVs, including electric variants, is expected to continue with new model launches. However, the domestic Commercial Vehicle (CV) sector might experience a short-term dip of 4-7% in FY25 due to high base effects and election-related slowdowns, though long-term growth prospects remain strong, supported by infrastructure investments and a robust macro-economic environment.
Indian cement makers are optimistic about achieving single-digit growth in the coming quarters, driven by healthy demand and unaffected by potential slowdowns from the upcoming parliamentary elections.
Additionally, India is set to accelerate the development of its national highways to establish a world-class road network by 2037, aiming to expand the highway length to over 200,000 km from currently around 144955 Km in FY23.
Global Markets: US market short to medium term remains positive .This week, the US economy remained a focal point, with markets showing stability amidst speculation about the Federal Reserve’s future interest rate decisions. Fed officials hinted at a possible rate cut later in the year, aiming to reach a 2% inflation target, while others advocated for a patient approach to monetary policy. The latest data revealed the second estimate of US GDP which grew at an annualized rate of 3.2% in Q4 CY2023, slightly below the initial 3.3% estimate, highlighting the economy’s resilience. Despite mixed opinions among Fed officials, the central bank’s strategy appears to be data-driven and aimed at balancing economic growth with inflation control. The overall sentiment suggests a cautious but optimistic outlook for the US economy, with a focus on achieving sustainable growth and stability.
Brent crude oil is trading at $82, buoyed by geopolitical risks in the Middle East and the Russia-Ukraine conflict. The upcoming OPEC+ meeting in March is anticipated, where discussions on extending output cuts are expected, likely maintaining voluntary production limits until the June meeting to stabilize the market. Additionally, tensions including the uncertain ceasefire between Israel and Hamas, and Houthi attacks on Red Sea shipping, contribute to a risk premium on oil prices.
Primary Market: This week, commencing February 23rd, 4 mainboard IPOs Platinum Industries Limited, Exicom Tele-Systems Limited, Bharat Highways Infrastructure Investment Trust and Mukka Proteins Limited opened with the target to raise INR 3,388 crores.
The IPO market is all set for a busy month ahead, with several new initial public offerings (IPOs) scheduled to debut on the Street.
Mainboard IPOs of R K SWAMY, JG Chemicals and Gopal Snacks are scheduled to hit the street to raise INR 1,324 crores. (The author is Managing Director, Pantomath Capital Advisors Pvt. Ltd.)
IPO Market ‘Marches’ Into Big Month
