Should you skip Vijaya Diagnostics IPO?

Hi there, Good Morning. Welcome to ETMarkets Morning, the show about money, business and markets. I am Nikhil Agarwal. Let's start with the headlines first.

- Reliance close to acquiring REC Group
- Ola IPO to hit the Street early next year
- Foreign holding in LIC may be capped at 20%
- US troops pull out of Afghanistan, ending 20-year war


Now lemme give you a quick glance on the state of the markets.

Dalal Street is likely to have a tepid start this morning. Nifty futures on the Singapore Exchange traded 40 points lower at 8:20 hours (IST). Asian markets opened lower on Tuesday after a mixed close on Wall Street with a dearth of fresh market-moving events and investors shifting their focus to Chinese economic data. MSCI's broadest index of Asia-Pacific shares outside Japan was down by 0.23 per cent.

Elsewhere, the yield on 10-year Treasuries dipped to 1.27%. The dollar hovered near two-week lows against a basket of currencies on Tuesday with trade seen driven by month-end flows as investors looked ahead to US jobs figures later in the week. Oil prices fell on Tuesday on concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output. US WTI crude futures were down 41 cents, or 0.6%, to $68.80 a barrel.

That said, here’s what is making news.

Nine companies, including Aditya Birla Sunlife AMC and Utkarsh Small Finance Bank, are seeking to collectively garner about Rs 12,500 crore in September, ending a brief interlude of relative calm between two frenetic bouts of initial share sales in Mumbai even as India’s
broadest equity indices soar to dizzying new heights. Vijaya Diagnostics, Ami Organics, Sansera Engineering, Arohan Financial, Penna Cement, Shree Bajrang Power & Ispat, and Paras Defense are the others that have lined up primary share sales, which should already ensure a record harvest for CY21.

Reliance Industries (RIL) is close to acquiring REC Group, the largest solar panel manufacturer in Europe, for $1-1.2 billion from China National Chemical Corp (ChemChina), ET reported. The purchase will help RIL access cutting-edge technology and global manufacturing capabilities as it continues with its recently-announced march into green energy. Reliance is in talks with global banks to raise $500-600 million in acquisition financing for the transaction, while the rest will be funded via equity.

Global shipping costs are at a multi-year high, which has propelled stocks of global sector giants such as Maersk and Hapag-Lloyd to record levels following triple-digit growth in their operating profits in the quarter ending June. That, however, has not rubbed off on India’s largest private shipping company Great Eastern Shipping, whose stock has lost 15% on the bourses during the past three months due to the pressure on the liquid cargo business. Analysts though expect a turnaround from the September quarter given the recent rally in the Baltic Dry Index, which often precedes an economic recovery. Consequently, the stock has gained 20% in the past five trading sessions.

LASTLY,
The post-issue valuations of Vijaya Diagnostics are at 47 times its earnings of the trailing four quarters, higher than that commanded by its larger listed peer Thyrocare. This leaves little value on the table for investors. The Covid-19 pandemic brought the diagnostics sector under increased investor focus. However, the recent correction in smallcaps has brought down the overall expectations. Krsnaa Diagnostics, listed earlier in August, is trading below its offer price. Investors need to wait out the pandemic to get a more realistic idea about the prospects of the diagnostic businesses.

NOW Before I go, here is a look at some of the stocks buzzing this morning...

US e-commerce giant Amazon has written to Sebi requesting the market regulator to direct stock exchanges to withdraw the 'Observation Letters' that were issued related to the proposed Rs 24,713-crore Future-Reliance deal.

The Ministry of Power is considering issuing a statutory order that will allow Tata Power and Adani Power to sell electricity from their
plants – of 4,400-MW total capacity – in Mundra (Gujarat) on the exchanges for a month, ET reported.

Maruti Suzuki, the carmaker that sells one out of every two cars running on Indian roads, said it will raise prices — for the third time in 2021 — across its product range next month to offset an increase in input costs.

Lenders to the Avantha Group’s 600 MW distressed Jhabua power plant have come to an agreement with the state-owned National Thermal Power Corporation (NTPC) to complete the sale of the asset, more than two years after the case was taken to bankruptcy courts.

Shriram City Union Finance is eyeing total disbursements of Rs 22,000-23,000 crore in the current financial year.

Do also check out over two dozen stock recommendations for today's trade from top analysts on ETMarkets.com.

That’s it for now. Stay with us for all the market news through the day. Happy investing!