A Mixed Bag For Domestic Markets
The biggest news was that of HDFC Bank approving the amalgamation of its wholly-owned subsidiaries HDFC Investments and HDFC Holdings with HDFC, and that of HDFC into HDFC Bank, to create a financial giant
Domestic frontline equity indices Nifty 50 and Sensex made a strong comeback during the fortnight, recording gains of 5.47 per cent and 5.79 per cent, respectively, on account of easing crude oil prices and improving global market cues. BSE Mid-Cap and Small-Cap indices relatively lagged broader markets, registering gains of 4.62 per cent and 4.93 per cent, respectively. A bolt from the blue was that the board of HDFC Bank approved the amalgamation of its wholly-owned subsidiaries HDFC Investments and HDFC Holdings with HDFC, and that of HDFC into HDFC Bank, to create a financial giant.
As part of the merger, 42 shares of HDFC Bank would be given for every 25 shares of HDFC. Post-merger, HDFC Bank will be 100 per cent owned by public shareholders and existing shareholders of HDFC will own 41 per cent of HDFC Bank. The merger is expected to be completed by the second or third quarter of FY24. BSE Bankex index soared 6.88 per cent over the fortnight. As per data released by Telecom Regulatory Authority of India (TRAI), in the month of January, Reliance Jio and Vodafone Idea reported a month-on-month fall in mobile subscribers while Bharti Airtel reported gains.
Reliance Jio saw a drop for the second consecutive month as its customer base declined by 9.3 million to 406.3 million. Bharti Airtel’s subscriber base increased to 356.4 million, slightly higher than the 355.7 million at the end of December. Meanwhile, as shortage of electronic components continued to impact automobile production in the country, March turned out to be a mixed bag for the domestic automotive industry. Tata Motors, Skoda and Kia recorded their highest ever monthly sales whereas Maruti Suzuki and Hyundai Motors posted a decline. Venerable auto maker Maruti Suzuki India sold 8 per cent fewer units at 1,37,658 last month in domestic markets as against last year.
Nevertheless, the company exported 26,496 units during March 2022, clocking its highest ever monthly exports. Over the fortnight, BSE Auto and BSE IT indices surged ~3.30 per cent each. Amid inflation-induced price hikes by fast-moving consumer goods (FMCG) companies, consumers have started buying smaller stock-keeping units (SKUs). According to retail intelligence platform Bizom, four out of six categories tracked are witnessing down-trading in rural markets while five of six in urban markets have also seen a similar trend.
BSE FMCG and BSE Healthcare indices climbed 2.86 per cent and 1.83 per cent during the fortnight. S & P Global India Manufacturing Purchasing Managers’ Index fell marginally to 54.0 in March from 54.9 in February. The fall highlighted the joint-weakest rate growth since September 2021. The report said that while business conditions improved, the latest results showed slower expansions in factory orders and production as well as renewed decline in new export orders. Dampened by inflation concerns, business confidence has fallen to its lowest level in two years.
BSE Power and BSE Oil and Gas indices were the Top Gainers over the fortnight, rallying 10.47 per cent and 8.25 per cent, respectively.
India’s fuel sales soared past the pre-pandemic levels in March on twin impact of the economy rebounding from the lifting of pandemic-related restrictions and anticipation of price increases leading to stocking. GST collections in March 2022 hit an all-time high of ₹ 1.42 lakh crore, driven by economic recovery and anti-evasion drives such as action against fake billers. According to the Ministry of Finance, the gross GST collections in March 2022 breached the earlier record of ₹ 1.40 lakh crore collected in January 2022. Trading data shows that during the fortnight, FIIs and DIIs were net buyers to the tune of ₹ 1,397.86 crore and ₹ 9,548.23 crore, respectively.
