Sensex crash 897 points and Nifty slips below 17,200. Investors lost Rs 4 lakh crore of wealth, Markets at 5-month low
On Monday, Indian markets experienced a sharp decline as both Sensex and Nifty dropped by around 1.5%. This was primarily due to the negative global cues following the collapse of two US-based banks – Silicon Valley Bank and Signature Bank. The crisis at Silicon Valley Bank led to a steep decline of over 60% in its shares. This was followed by the closure of Signature Bank by state regulators. The US government and regulators have assured that they are committed to ensuring the safety of depositors’ savings.
As a result of these events, Indian investors lost approximately Rs 4 lakh crore of wealth, causing the volatility index to rise by almost 21%. This marks the largest single-day increase in a year and has led to Indian benchmarks hitting a five-month low. The market has been in the red for three consecutive days.
IndusInd Bank shares slid 7.5% on lower tenure extension for CEO
IndusInd Bank’s stock price dropped by 7.5% following the Reserve Bank of India’s (RBI) decision to reappoint Mr. Sumant Kathpalia as Managing Director (MD & CEO) for a shorter tenure of two years instead of the board’s approved three years. This decision by the RBI has caused concern among investors, leading to a decline in the bank’s stock price.
Over the past three months, IndusInd Bank’s performance has been weak, with its stock falling 12% compared to a 5% decline in the S&P BSE Sensex. This news comes as a further setback for the bank, which has been struggling to maintain investor confidence amidst a challenging economic environment.
Hyundai has signed a term sheet to acquire General Motors Talegaon plant
Hyundai has signed a term sheet to acquire General Motors’ Talegaon plant, which the South Korean automaker plans to use for exporting its compact SUV, the Venue. The plant has an installed manufacturing capacity of approximately 1.3 lakh units and 1.6 lakh engines per annum. General Motors had earlier entered into an agreement to sell the plant to Chinese carmaker Great Wall Motors, but the deal fell through when the latter decided not to enter the Indian market.
The acquisition of the Talegaon plant is part of Hyundai’s plans to launch six electric vehicles (EVs) in India and commit an investment of Rs 4,000 crore till 2028. The company’s Managing Director has stated that they intend to offer a complete range of EVs. General Motors had invested $1.4 billion (approximately Rs 11,441 crore) in India, but had incurred losses during the winding-down process. The acquisition of the Talegaon plant by Hyundai presents a new opportunity for the plant and the Indian automotive industry.
Global Surfaces IPO subscribed
On the first day of bidding, Global Surfaces’ initial public offering (IPO) was subscribed 42%, with investors bidding for 32.75 lakh equity shares against the IPO size of 77.49 lakh shares. This marks the second public issue to be launched in 2023, following Divgi TorqTransfer Systems, an auto ancillary company.
Retail investors showed a strong interest, booking 60% of their allotted quota. However, the response from qualified institutional buyers was less enthusiastic, as they bid for only 1% of the shares reserved for them. High net worth individuals also displayed a muted response, bidding for only 9.46 lakh equity shares against their reserved portion of 16.6 lakh shares.
As the IPO subscription continues, it remains to be seen how investors respond in the days ahead.
India’s retail inflation eases to 6.44% in Feb, but remains above RBI’s target band
India’s retail inflation decreased slightly to 6.44% in February from January’s three-month high of 6.52%. According to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday, Inflation in the food basket for February 2023 was recorded at 5.95%, which is a marginal increase from January’s figure of 5.94%. The food basket holds a weightage of 39.06% in the overall Consumer Price Index. In January, the Consumer Price Index (CPI) based retail inflation stood at 6.52% after declining to a one-year low of 5.72% in December. As inflation in the food basket remains elevated, it could have implications for the overall inflation rate in the coming months
