Street Signs: The VIX vaporub for mkts, Budget let-down for Midhani & more

The VIX vaporub for markets

The India Volatility Index (VIX), a ‘fear gauge’ measuring market risk and investor sentiment, fell close to 9 per cent on Friday to end at 14.4. The benign reading on the index gave analysts hope that the market may stabilise at around the current levels after a tumultuous week, particularly for Adani Group and the banking pack. “From a volatility perspective, the post-Budget Indian VIX has declined considerably below 15, notwithstanding large index moves. We believe the Nifty is trying to form some base near 17,500 levels. Since most results from index heavyweights are out, along with crucial events, markets are likely to stabilise near current levels. Further acceleration is likely if the Nifty sustains above the 17,800 mark,” said a note by ICICIdirect. The Nifty last closed at 17,854.

Budget let-down for Midhani 

Shares of state-owned defence firm Mishra Dhatu Nigam (MIDHANI) fell more than 4 per cent last week as the Budget announcements left investors disillusioned. A lower allocation to Indian Space Research Organisation (Isro) could lead to a derating in the stock of the superalloys manufacturer, says an analyst. In absolute terms, 2023-24 estimated (FY24E) space budget and capital expenditure on research are at a similar level as 2019-20. “We believe the current order book is likely to get executed by FY24E. However, because of the reduced budget for Isro, we lower our valuation multiple to 12x corresponding to the mean level over the past three years,” said ICICI Securities in a note.

Monarch, Quint suffer collateral damage

The crash in 10 Adani Group stocks since the Hindenburg Research report was released on January 24 has been discussed threadbare. However, two stocks that have suffered collateral damage have got little attention. Shares of Quint Digital Media nearly halved in the past two weeks, while those of Monarch Networth Capital crashed 40 per cent. Adani Group isn’t a promoter group in these two firms. However, Adani Enterprises has a 49 per cent stake in Quintillion Business Media, an indirect subsidiary of Quint Digital, that owns and operates a business and financial news digital media platform viz., BQ Prime, formerly BloombergQuint. Meanwhile, Monarch is believed to have close ties to Adani Group. However, the brokerage has clarified that Adani Properties holds an inconsequential 0.03 per cent stake in the company. Albula — an offshore fund identified by Hindenburg as a proxy of Adani’s with significant holdings in the group firms — holds a 9.75 per cent stake in Monarch. The firm says this stake was acquired in erstwhile firm Networth Stock Broking, which later got merged with the company.