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Shares of Zee Entertainment Enterprises (ZEEL) tanked 13 percent on the BSE to Rs 242.20 in Tuesday’s positive intra-day trade as reports said Sony Group is planning to call off the merger pact of its India unit with the company.

Today, the stock of the TV broadcasting & software production company reported its sharpest intra-day fall since February 23, 2023, when it fell 14 percent, as per BSE data.

The average trading volumes on the counter jumped over six-fold today. A combined 57.39 million equity shares, representing nearly 6 percent of the total equity of ZEEL, changed hands on the NSE and BSE till 10:22 AM.

In comparison, the S&P BSE Sensex was up 0.80 percent at 71,926.

According to a Bloomberg report, Sony Group Corp plans to call off its merger with ZEEL, citing people aware of the matter. The Japanese conglomerate is likely to send the termination letter to ZEEL before January 20.

Last month, the two companies were given a one-month grace period to close the merger of their India operations that would have created a $10 billion media behemoth.

Zee had requested an extension. Sony wanted to hear Zee’s proposals for completing the “remaining critical closing conditions”.

Meanwhile, the Cricket World Cup during October-November is likely to impact advertising revenue growth for ZEEL in the December quarter (Q3FY24).

Ad revenue recovery remains gradual and analysts at Emkay Global Financial Services expect a decline of 3.5 percent year-on-year (YoY). Market share should also decline sequentially owing to the cricketing event.

“We expect flat YoY growth in subscription revenue, as Q3FY23 saw one-off revenue of Rs 48.5 crore. Other sales and services revenue should also decline sharply by 70 percent QoQ due to no major movies,” they estimate. 

Consolidated revenue should decline 11 percent QoQ due to lower revenue from other sales and services.

EBITDA margin should decline to 11 percent from 13.6 percent in Q2FY24 given lower revenue,” the brokerage said in the Q3FY24 preview note.

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Shares of Fiem Industries hit a new high at Rs 2,441.80, as they zoomed 15 percent on the BSE in Monday’s intra-day trade after the company said its board will meet on January 15 to consider bonus issue.

In an exchange filing, Fiem Industries said the meeting of the board of directors is scheduled on 15/01/2024, among other things, to consider and approve /recommend the issuance of bonus shares, subject to the approval of the shareholders of the company.

Fiem Industries is engaged in manufacturing Automotive Lighting and Signaling Equipment, Rear View Mirror, Plastic Moulded Parts, and other Auto Components. The company also manufactures LED Luminaries/ LED Products for general lighting applications and LED Integrated Passenger Information Systems for buses and railways.

The management expects the company to continue to benefit from its diversified product and customer mix. For the Q2 of the current financial year, the two-wheeler industry has registered a production volume of 5.6 million units.  The management expects a strong second half driven by the festive season and pick-up in rural demand.

Meanwhile, Fiem Industries has entered into a partnership and signed one MoU with Gogoro India to expand its product portfolio in the Electric-2W segment. Gogoro India is a group company of Gogoro Taiwan which is Taiwan’s leading Electric2W manufacturer and is regarded as a world leader in battery swapping technology.

Gogoro will provide the technical know-how and other support in setting up the manufacturing facility and production, quality, and testing support for the new product line. This partnership will open up a new electronics segment for Fiem, which can provide significant growth and new opportunities in the EV segment, the company said in its FY23 annual report.

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The number of dematerialized (demat) account additions in 2023 exceeded 31 million, driven by the rally in the markets, stupendous gains in small and midcaps, and the robust performance of initial public offerings (IPOs).

The number of Demat accounts opened with the two depositories – the Central Depository Services (CDSL) and the National Securities Depository (NSDL) — rose 28.7 percent in the past 12 months, from 108.1 million to 139.2 million. About 4.1 million demat accounts were added in December 2023, making it the highest-ever monthly addition.

“The 2023 market gave double-digit returns after a muted 2022. This rally was broad-based. All segments, including microcaps, worked. There is a tremendous amount of liquidity in retail, and their ownership of equities is rising,” said Prakarsh Gagdani, former CEO of 5paisa Capital

The benchmark Nifty50 rose 20 per cent in 2023. The Nifty Midcap 100 rose 46.6 percent and the Nifty Small Cap 100 rose 55.6 percent.

India’s macroeconomic stability, corporate earnings, and robust inflows from domestic institutional investors and foreign portfolio investors (FPI) helped the Indian markets end with gains. The US Federal Reserve’s dovish pivot and the Bharatiya Janata Party’s win in three out of five key state Assembly elections further boosted the rally.

The IPO gush was an investor lodestone. In 2023, 57 IPOs hit the markets and raised Rs 49,434 crore. Given the gains this year, investor sentiment toward IPOs has become more favorable. Brokers said many existing investors are opening new accounts for their family members to increase their chances of securing IPO allotments.

“In December there was a series of IPOs, which contributed to the demat addition. After December 3, the markets started reaching an all-time high. Even mid and small-cap indices continued to hit new highs. In such an ebullient market, demat account openings are expected to be robust, which is on the expected lines,” said Jimeet Modi, founder and CEO of Samco Securities.

Alok. C. Churiwala, the managing director of Churiwala Securities, said IPOs were the biggest catalyst for new account opening this year.

“When an investor is testing waters in capital markets, the usual way is by investing in IPOs. This year, the issues were fairly priced, and one was most likely to make money if one managed to get the allotment,” he said.

Brokers are cautiously optimistic about the outlook. At the same time, some feel the earnings momentum will sustain the gains made in 2023. Some are circumspect, considering the headwinds we must grapple with this year.

“It is going to be a volatile year. We have elections, and one needs to see whether the Fed rate cuts pan out how investors expect. We are not expecting four million accounts to open every month. We will revert to the average of 2-2.5 million monthly accounts,” Modi added.

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Markets watchdog SEBI on Friday said that institutional investors have to disclose upfront at the time of placing an order whether a proposed transaction is a short sale or not, a significant move aimed at curbing market volatility.

The Securities and Exchange Board of India (SEBI) has made certain changes concerning norms about short selling in the market.

Short selling refers to selling a stock that the seller does not own at the time of trade. Both retail and institutional investors are permitted to short-sell stocks.

Amending a circular relating to short selling issued last year, SEBI said, “The institutional investors shall disclose upfront at the time of placement of order whether the transaction is a short sale”.

However, retail investors would be permitted to make a similar disclosure by the end of the trading hours on the transaction day.

“The brokers shall be mandated to collect the details on scrip-wise short sell positions, collate the data, and upload it to the stock exchanges before the commencement of trading on the following trading day.

“The stock exchanges shall then consolidate such information and disseminate the same on their websites for the information of the public every week,” SEBI said in a circular on Friday.

The circular, issued to stock exchanges, clearing corporations, and depositories, also said the frequency of such disclosures may be reviewed from time to time with the approval of SEBI.

In recent times, there have been concerns about the practice of short selling and subsequent volatility in the securities market.

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Shares of Nestle India slipped 2 percent to Rs 2,644 on the BSE in Friday’s intra-day trade in an otherwise firm market on profit booking. The stock of the packaged foods company turned ex-date for a stock split in the ratio of 1:10, wherein 1 equity share of the face value of Rs 10 was divided into 10 equity shares of the face value of Rs 1 each.

Nestle India had fixed January 5, 2024, as the record date for determining the entitlement of equity shareholders for sub-division/ split of its equity shares.

Since October 19, 2023, the stock price of Nestle India outperformed the market and surged 19 percent after the company announced a stock split. The stock hit a record high of Rs 2,770.75 (adjusted to split) on January 1, 2024.

To enhance the liquidity of the company’s equity shares and to encourage the participation of retail investors by making equity shares of the company more affordable, the company decided on a stock split, Nestle India said.

A stock split is a corporate action in which a company issues additional shares to shareholders, increasing the total shares by the specified ratio based on the shares they held previously.

Companies often choose to split their stock to lower its trading price to a more comfortable range for most investors and to increase the liquidity of trading in its shares.

Meanwhile, Nestle India has seen one of the higher growth rates among fast-moving consumer goods (FMCG) companies as it continues to benefit from distribution expansion, especially in rural India. The revenue growth is broad-based across segments and geographies.

Further sustainability of growth is expected from innovation, higher capex plans coming on stream over the next couple of years, continued thrust on RURBAN (rural and urban) strategy, and higher media investments. Nestle India has also reported strong margin performance in the quarter and will continue to focus on profitability along with topline growth. Premiumization will also be an important driver of growth and profitability improvement, analysts at KRChoksey Shares & Securities said in the September quarter (Q3CY23) results update.

Nestle India’s strong portfolio of brands and well-spread distribution network will improve product penetration and continue to support performance. Consistent demand for packaged foods and increased focus on consumer engagement initiatives are expected to support performance in the long term. However, uncertain and deficit rain remains a key negative for the stock, analysts at Geojit Financial Services said in the result update.

On commodity outlook, Nestle India, announcing Q3 results on October 19, had said that uneven rain and rain deficit are expected to impact the production of maize, sugar, oilseeds, and spices which may adversely impact pricing. Coffee continues to be volatile because of the global supply deficit.

The weather during the harvest of the Indian Robusta crop may impact production. Upcoming winter weather may impact wheat production. A healthy milk flush is expected in winter which is expected to keep prices stable, the company said.

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