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Unpleasant Monday!

Tale of the Tape

Hello, everyone. The stock market had a tough day!

Nifty (-0.8%) and Sensex (-0.9%) erased gains to close near day’s low. Investors are awaiting India’s inflation data. 😔

Except IT (+0.3%), all other sectors closed lower. Media (-1.8%), PSU Banks (-1.3%) and Real Estate (-1.36%) dragged the markets. 👎

Antony Waste (+9.3%) won new orders worth Rs 1,000 cr. The stock climbed the most in four months. 📈

Venky’s India (+3.8%) to set up a new factory for making veterinary medicine products. The company expects commercial production to begin in June. 🏭

Tega Industries makes a stellar debut. The stock closed at Rs 718, up 58% from its issue price. 🚀

Minda Industries (+10.3%) to expand its alloy wheel business. The company sets aside Rs 190 cr for expansion works. ⚙️🛠️

TVS Motors (-1%) and Zoho to invest $15 million in Ultraviolette, an EV startup. 🔌🛵

Gravita India (+4.3%) begins operations at its new battery recycling unit at Mundra Port. 🔋

TV18 Broadcast (+4%) extended gains to day 5. The stock is up 24% in that period. 🤑 

IPO update. MapMyIndia IPO was subscribed 155X on the final day. Metro Brands IPO got subscribed 50% on day 2. And, MedPlus was subscribed 55% on the opening day. There’s more. Data Patterns IPO will open tomorrow. Read more below. 👇

Cryptos were largely quiet. Bitcoin and Ethereum traded flat. Solana was down 1%. 😟

Here are the closing prints:

Nifty 17,368 -0.8%
Sensex 58,283 -0.9%
Bank Nifty 36,925 -0.5%

Dhan, Dhana, Dhan Fashion!

Reliance Industries is making further moves in the ever-growing fashion industry. 💃

Mr. Ambani is keen to make a style statement! The textiles and apparel industry is a textbook India growth story. The industry could grow 12% compounded annually by 2025, to touch $220 billion (vs $100 billion in FY19). 🤑 Key growth drivers include rising income levels and growth in organised retail. Add to that, India is the 2nd largest exporter of textiles and clothing. 👊

So, what is Mr. Ambani up to now? Sintex Industries, a bankrupt Indian textile firm, needs a savior. 🆘 Reliance Industries has joined hands with Assets Care & Reconstruction Enterprise to bid for Sintex Industries. FWIW: Sintex offers fabric to fashion brands like Armani, Hugo Boss and Diesel. 👖

Notably, Ambani is no stranger to the fashion industry. This year alone, his companies purchased Lee Cooper’s IP rights for its use in India. It also acquired stakes in Ritika, and MM styles, and Ritu Kumar and Manish Malholtra’s designer brands. 👍

However, this acquisition may not be so easy. There’s other bidders like Easygo Textiles and GHC. Let’s see if Ambani can get another deal done! 🤝

New Week, Another IPO!

Data Patterns IPO will open on Dec 14. The price band is fixed at Rs 555-585 per share. The company plans to raise Rs 588 cr from the markets. 💰

Founded in 1985, Data Patterns makes electronic systems for the defense and aerospace sectors. It also offers software and engineering services to add to its hardware products. It is one of the fastest growing companies in its segment. Fun fact: Its products were used in BrahMos missile, the country’s top cruise missile system. 🪖The company plans to use the proceeds to repay its debt, and to scale up its facility in Chennai.

Financial Snapshot:

  • FY21 Revenue: Rs 224 cr; +44% YoY
  • FY21 Net profit: Rs 56 cr; +1.5X YoY

India is one of the top five spenders in the defense sector. The country’s defense electronics market is expected to touch $7 billion in 2030 (vs $1.8 billion in 2021). 💸

Bulls will point to its industry-best margin, huge market opportunity and its product portfolio. Bears will highlight its high dependence on government contracts, and its limited set of clients. 🥺

Rating Games

IndiaTech, an industry association for tech startups, wants the government to add guidelines for online gaming. 🕹️

India’s online gaming industry is super hot. India now has 300 million gamers! The online gaming industry is estimated to grow 21% compounded annually by FY25, to reach Rs 29,000 cr. 🎮

BUT, India’s gaming sector is facing obstacles in several states. 😓Notably, Dream 11 is battling the state of Karnataka. Karnataka claims the fantasy sports platform violates its online betting laws. Dream Sports obviously disagrees. And now, IndiaTech says norms can help clear the confusion. 🤓

Here is IndiaTech’s proposal. They want the Union government to implement nationwide guidelines for the sector. 🗃️ They’re proposing adding content ratings for games based on appropriate age classification and content type, similar to ratings followed in the US and Canada. Proposed guidelines could also include AI-based interventions to reduce playing time and money spent. If approved, India’s gaming startups would have more clarity and avoid issues in individual states. Also, certain games like Dream 11 would be treated as skill-based games (i.e. non-addictive). 😎

Let’s see what the government thinks of IndiaTech’s plea.🪧