Month: February 2022

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Bullion prices extend gains; gold prices to trade sideways to up this week, resistance at $1890 per ounce

Commodity prices traded higher with most of the commodities in Non-Agro segment witnessed buying during the week despite of stronger dollar. Bullion prices rallied on inflation hedge and Russia-Ukraine tensions. Crude oil prices traded higher on tighter supply and higher demand. Base metals ended in green on strong demand recovery and lower supply fears.

Gold prices traded higher with spot gold prices at COMEX rose by 2.79% to $1859 per ounce for the week. Gold April futures at MCX ended 2.53% up at Rs. 49114 per 10 gram along with rupee depreciation. The spot rupee fell by 0.91% at 75.38 against the dollar for the week. Gold ETF holdings witnessed inflows as holdings at SPDR Gold Shares rose to 1019 tonnes from previous week’s 1012 tonnes as investors rushed to hedge against higher US inflation. The CFTC data showed that money managers have increased their net long positions by 22341 lots in last week.

Silver prices rallied with spot silver prices at COMEX surged by 4.74% to $23.59 per ounce for the week. MCX Silver March futures ended 3.53% higher to Rs. 62988 per KG for the week. Silver prices outperformed gold this week with strong demand outlook for industrial metals. The CFTC data showed that money managers have decreased their net long positions by 1434 lots in last week.

Bullion prices extended gains on Monday with spot COMEX gold prices traded near three month highs on heightened tension on Russia-Ukraine stand-off. The geopolitical risk spurred buying in precious metals despite of imminent rate hike expectations from US FED. Bullion prices traded higher on inflation hedge after US consumer prices jumped 7.5% last month from a year earlier, the steepest year-over-year increase since February 1982. The geopolitical risk over Russia-Ukraine tension boosted buying after US warned that Russia could invade Ukraine at any time in coming week. The dollar index rose by 0.63% to 96.08 mark in last week while the yield on the 10-year US Treasury note fell 7.7 basis points to 1.951%. The U.S. Federal Reserve will release the minutes from its last meeting later in the week which may keep volatility high in bullion prices.

We expect gold prices to trade sideways to up in this week with COMEX spot gold resistance at $1890 per ounce and support at $1830 per ounce. At MCX, Gold April prices have near term resistance at Rs. 50200 per 10 grams and support at Rs. 48900 per 10 gram. COMEX Spot silver has near term resistance at $24.50 per ounce with support at $22.90 per ounce. MCX Silver March has important resistance at Rs. 65600 per KG and support at Rs. 61500 per KG.

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Sequoia-backed Cloudnine files DRHP with SEBI, plans to raise Rs 1,200 crore via IPO

Cloudnine, a super-specialty mother and babycare chain of hospitals has filed its draft IPO papers with capital markets regulator SEBI today. The company is looking to raise around Rs 1,200 crore from the public issue of equity shares, news agency PTI reported. The IPO of Cloudnine will be a mix of a fresh issue of equity shares and an offer for sale (OFS) by existing shareholders of the company, the DRHP highlighted. Cloudnine is backed by marquee investors, including True North Fund V LLP, Sequoia Capital Investment, among others.

The draft red herring prospectus of Cloudnine’s IPO showed that the company will issue fresh equity shares of face value Rs 5 each for a total of Rs 300 crore. The offer for sale of the company will see shareholders sell a total of 1.32 crore equity shares. R Kishore Kumar, Scrips ‘N’ Scrolls India Pvt Ltd, True North Fund V LLP, Indium V (Mauritius) Holdings Ltd, and Sequoia Capital Investment are among the key shareholders selling shares in the IPO.

The company will receive only Rs 300 from the entire issue while the remaining share will go to selling shareholders. Front the funds raised, Cloudnine wants to repay and/or pre-pay, in full or part, of certain borrowings availed by the company. Cloudnine plans to spend Rs 95 crore on the same. Further Rs 117.9 crore will be used to set up new centers at various locations. Cloudnine also plans to use the funds raised to Acquire further shareholding in Acquity Labs — a subsidiary.

75% of Cloudnine’s IPO is reserved for Qualified Institutional Buyers (QIB) while 15% is reserved for Non-Institutional Investors and only 10% for retail investors. For the six months ended September 30, 2021, revenue from operations grew 42.8% to Rs 371 crore against Rs 260 crore in the same period a year ago. Cloudnine’s revenue from operations grew 7.42% to Rs 554.59 crore for fiscal 2021 as compared to the previous year. JM Financial, ICICI Securities and Axis Capital are the book running lead managers to the issue.

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IRCTC share price jumps over 3.5% on stellar Q3 results; stock may rally 60% in one-year time frame

IRCTC share price surged over 3.5 per cent to Rs 868.10 apiece on BSE, after the company posted a consolidated net profit of Rs 208 crore during the third quarter of FY22. Indian Railway Catering and Tourism Corporation stock is still 47 per cent down from its 52-week high touched in October last year. IRCTC’s board has also declared an interim dividend of Rs 2 per share each for the financial year 2021-22. It has fixed Friday, 18 February, as record date for the purpose of payment of interim dividend for the same. “Despite strong Q3FY22 earnings, IRCTC stock price remains subdued due to weak global sentiment leading to significant pressure on mid & small cap stocks,” Pavitraa Shetty, Co-founder & Trainer, Tips2Trades, told Financial Express Online.

Shetty also added saying that technically, only a daily close above Rs 870 apiece would lead to strong buying in IRCTC for a target of Rs 900-945 per share. It may be noted that IRCTC had fixed 29 October 2021 as the record day for the stock split in the ratio of 1:5. Before the split, stock had rallied to Rs 6,375.

IRCTC’s revenue from operations gained over 141 per cent to Rs 540 crore in October-December quarter of FY22 as compared to Rs 224 crore in Q3FY21. Analysts said that the steep surge in net profit is mainly led by contribution from all the segments and low base of last year. “The company has also declared an interim dividend and the recent Budget announcement on additional Vande Bharat trains is going to benefit IRCTC share price in long term,” Ravi Singh, VP & Head of Research, Share India Securities, said. Singh also added that at current juncture, technical setup is suggesting a target of 950 levels in near term.

In the traded volume terms, nearly 5 lakh IRCTC shares have exchanged hands on BSE, while a total of 60.27 lakh scrips traded on NSE, so far in the day. “IRCTC has reported great results in all parameters. Investors can look to buy the IRCTC stock on dips, keeping a target price of Rs 1,350 within one year time frame,” Ravi Singhal, Vice Chairman, GCL Securities, said.

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Sebi comes out with new disclosure format for abridged prospectus

To further simplify and provide greater clarity, markets regulator Sebi has come out with a new format for disclosures in abridged prospectus, whereby critical information will be provided in the front page of the offer document. Under the rules, every application form for the purchase of any securities of a company needs to be accompanied by an abridged prospectus.

After reviewing the disclosure requirement, it was felt that due to the multitude of information which is required to be disclosed, the look and text on the front page appears to be crowded, Sebi said in a circular issued on Friday. Under the revised format, a company will have to disclose about name of the promoter, details of offer to public — types of issue, fresh issue and offer for sale (OFS)component, total issue size — and share reservations details on the front page of the abridged prospectus (DRHP or RHP).

Also, the company is required to make disclosure about details of OFS by promoter, promoter group and other shareholders. In the abridged prospectus containing salient features of the Red Herring Prospectus (RHP), the company will have to disclose about price band and minimum bid lot under the revised format.

Also, the issuer company has to disclose about indicative timelines for opening and closing of the issue, initiation of refunds, credit of equity shares to demat accounts of allottees and commencement of trading of equity shares among others.

The new format is part of Sebi’s effort to further simplify, provide greater clarity and consistency in the disclosures across various documents and to provide additional but critical information in the abridged prospectus.

Sebi said that the abridged prospectus will be made available on the website of issuer company, lead managers, registrar to an issuers and a link for downloading the prospectus will have to be provided in price band advertisement. The issuer company and merchant bankers (MBs) will have to ensure that the disclosures in the abridged prospectus are adequate, accurate and does not contain any misleading or mis-statement.

Furthermore, the issuer company/MBs will have to ensure that the qualitative statements in the abridged prospectus will be substantiated with Key Performance Indicators (KPIs) and other quantitative factors. Also, no qualitative statement will be made which cannot be substantiated with KPIs.

Further, they will have to insert a Quick Response (QR) code on the front page of the documents such as front outside cover page, abridged prospectus, price band advertisement, etc as deemed fit by them. The scan of QR code will lead to downloading of prospectus, abridged prospectus and price band advertisement as applicable.

The new framework will be applicable for all issues opening after February 4.

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