Market update for 19 February 2021 – Dr Reddy’s gets vaccine ready

Profit booking seen in PSU bank shares

  • Earlier this week, there were reports that the government has shortlisted four PSU banks for privatisation. This created a buying frenzy in the shares of IOB, Bank of India, Bank of Maharashtra and Central Bank, which gained around 60% in a matter of three days. 
  • However, investors chose to book profits today, ahead of the weekend. Shares of these PSU banks fell in the range of 6-10%. 

Trent catches momentum after Q3 results 

  • The easing of Covid-related restrictions along with improving consumer sentiments helped Trent work its way back to recovery in Q3. After consolidating for the last two months, the stock seems to have garnered buying interest. 
  • The stock beat the weakness in the market, and closed 1.7% higher. The stock has jumped 26% in February. Its movement this week has taken the stock near its lifetime high of ₹804.7. 

Dr Reddy’s gets vaccine ready 

  • The pharma major said that it has initiated the process with the DGCI for emergency-use authorisation of the Sputnik V vaccine in India. The company will present the safety profile of its Phase 2 study and interim data of the Phase 3 study, which is expected to be completed by 21 February.
  • This vaccine is found to have 91.6% efficacy against the coronavirus. If authorised, the Sputnik V vaccine will be the third vaccine to be authorised for use in India after Covishield and Covaxin. Shares of Dr Reddy’s gained 2.3% today in an otherwise weak market.

IDFC First Bank to raise ₹3,000 crore

  • Shares of IDFC First Bank saw strong buying interest today and have gained nearly 20% this week. The bank’s board has approved plans to raise ₹3,000 crore. It had raised ₹2,000 crore via an institutional placement in June 2020.
  • Its management believes that the fundraise puts the bank in a strong position to take advantage of economic recovery. It is also expected to support a 25% growth in its retail lending book, for many years to come.
  • The stock rose to its highest level in three years and closed 7.8% higher today.

RIL plans to demerge O2C business

  • As per reports, the oil-to-retail conglomerate is planning to demerge its oil-to-chemicals (O2C) business into a wholly-owned subsidiary. It is believed that the move will help the company to attract global investors like Saudi Aramco, which is in talks with RIL for a stake in the latter’s oil business.
  • According to the plan, RIL’s O2C business, which includes its refining and petrochemicals assets, fuel retail (51% in a JV with BP) and bulk wholesale marketing businesses, will get hived off into a step-down subsidiary. The street expects that the reorganisation could lead to an eventual listing of key business verticals. Shares of RIL rose 0.6% today amidst a weak market.