Yesterday’s Market Performance

Nifty: 17711.30 I 37.30 (0.21%)
FII Sell Net: 14,395.40 CR
DAX: 15,365.27 I 116.71 (0.77%)

Sensex: 59413.27 I 254.33 (0.43%)
DII Buy Net: 13,948.96 CR
FTSE: 7,108.16 I 80.06 (1.14%)

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In today’s issue, we discuss;

• Aditya Birla Sun Life AMC is accessing the public markets; What’s up and what do you need to know?
• Automobile Numbers Preview for September’21 – Player wise performance et al.
• Jio to open their hearts (and wallets!)
• And an educational concept to widen your horizon (not saying otherwise 🙈)  Read along!

Godrej Properties: 2309.50 | +75.30 (+3.37%)

• The script was up over 3% after the real estate major entered into an agreement to redevelop a land parcel in the upscale neighborhood of Wadala, Mumbai

HDFC AMC: 2905.15 | -169.20 (-5.50%)

• The stock price slumped 5% after foreign promoter Standard Life Investments announced it is likely to sell 1.06 crore equity shares (5%) in HDFC Asset Management Company

India’s fourth-largest fund house (by AUM) is accessing the public markets; What’s up and what do you need to know? 💪🚀

• Aditya Birla Sun Life AMC is aiming to become the fourth fund house to list (think: HDFC AMC, Nippon AMC, UTI AMC), and raise INR 2,700 crore through an Initial Public Offering, with a price band of INR 695-712

• The issue is categorized as 100% Offer for Sale (no immediate capital requirements for the company), with the two promoters, Aditya Birla Capital & Sun Life AMC expected to offload ~14%

• Given the paltry returns generated through FDs, MF (equity, debt or hybrid) has emerged as a strong investment choice for individual retail investors and is reflective in overall SIP volumes recorded on a month on month basis, with ABSL AMC a key beneficiary (more on this below)

Okay! Give some details about the company please?? (Yes for sure my man) 🤓

• With a market share of 8.3% as of June 2021, the company has Assets under Management (AUMs) of ~ INR 2.9 Lakh Crores, making it the fourth largest AMC in the country (after HDFC, Nippon & UTI)

• The company has ~66,000 distributors, covering 290 locations, with a strong presence in Tier 2 & 3 towns; in comparison to competitors, who are heavily dependent on parent bank branch network, ABSL AMC has methodically built out a pan-India non bank network (to hold in good stead)

• Notwithstanding the pandemic, AUMs have grown at a CAGR of 18% over the last 4 years, helped by increased investor awareness campaigns & sub-par returns via other asset classes

• The company has ~7.2 Million Accounts, with annual growth of ~19% year on year vis a vis industry growth of 15%; the % of Equity SIPs (higher yields, greater consistency in contribution) also increased from ~25% in 2016 to >40% in 2021 

Automobile Numbers Preview for September’21 – What are the expectations? Player-wise performance et al. 🤔

• Commercial Vehicles (CVs) volumes are likely to maintain positive momentum in September’21, aided by healthy freight availability (over 2.1 Mn E-Way bills generated per day, which is higher than Pre-Covid levels), and better freight rates (indicative of burgeoning demand and easing supply bottlenecks)

• 2W industry volumes are likely to be significantly lower in comparison to last year, both due to a high base (if you recall, bumper sales last year) and supply-side bottlenecks persisting (chip shortages hasn’t abated yet)

• Likewise, Passenger Vehicle (PV) volumes are likely to decline massively, with a >40% drop in overall volumes to 167,000 units for the month; caused by an acute shortage in chips, with easing in supply-side issues likely in a gradual manner, Q3 onwards

• The upcoming festive season, and improving chip supplies are expected to support volumes going forward

Interesting! Give company-specific information? 🧐

• 2W Industry volumes are likely to be most impacted amongst the entire automobile space, with the greatest drop expected in Eicher Motors (Royal Enfield), which has suffered massively due to chip shortages

• In the Passenger Vehicle Space, retail sales are likely to be greater than wholesales, with a domestic volume decline of 6% for TTMT, 26% for MM and 57% YoY for MSIL

Okay, something positive bro? What do I do with the above? (Yess bro for sure) 🤨

• Commercial Vehicles, aided by strong freight rates & enhanced freight volume are likely record strong growth, with Eicher Motors expected to grow by 36% YoY, Tata Motors (TTMT) by 18% and Ashok Leyland by 17%

• The industry has suffered due to short term chip shortages, with supply side production unable to keep pace with increased demand; the initial outlook suggests an ease in present shortage starting October ‘21

What else caught our eye? 👀

Jio to open their hearts (and wallets!) 

• Jio rolled out their JioMart Maha Cashback offer recently – it can be redeemed for future recharges of Rs. 200 and above.
• The offer on Jio Mart offers 10% cash back while that on Jio offers 20% and can be redeemed from 2nd October onwards
• This may put Bharti in a slightly negative light (sentiment wise) and coupled with the expected tariff hike, they may not have much to celebrate this festive season

HDFC is back in action (in a huge way!!) 

• Post the lifting of the embargo against it last month, HDFC has issued over 4,00,000+ credit cards (as of Sept 21st)
• Their target is to not only improve their existing services but rope in new members as well through various new initiatives like co-branded cards with corporate India.
• HDFC Bank has 14.76 million credit cards in the market (as of July) but its market share dropped by > 2% due to the restrictions imposed.

American Airlines x Indigo

• American Airlines signed a code-share agreement with Indigo placing their code on 29 of the domestic routes of the Indian carrier.
• This gives Indigo’s customers more options to travel to different parts of the country. (yes we’re so in, let’s go)