Tug of war

Nifty50: 17,206  ▼ 69 (-0.4%)

Sensex: 57,683 ▼ 149 (-0.2%)

• The markets opened with a gap down, remained volatile throughout the day and closed near the day’s open.
• In all, 38 of the Nifty50 stocks closed in the red.
• FIIs have been net sellers of nearly ₹21,900 crore so far this month. 

Among the Nifty sectoral indices, Nifty Bank (+0.23%) and Financial Services (+0.03%) were the top gainers, while Media (-2.71%) and Metal (-2.07%) were the top losers.

For more updates on F&O, click here.

Here are the top stories of the day.

Domestic air traffic faces turbulence

According to industry reports, domestic air traffic in January saw a steep decline of nearly 43% month-on-month due to flight cancellations and Covid-induced curbs. Domestic airlines flew 64 lakh passengers in January 2022 as compared to 1.1 crore passengers in December 2021.

Indigo, which holds a market share of nearly 56%, cut its flights by 20% in January due to a fall in demand. On the other hand, Spicejet which holds a market share of nearly 11% reported the highest seat occupancy of 73%. The traffic is expected to show signs of recovery in the month of February with a drop in new cases and easing of restrictions.

Labs look for newer growth avenues

The surge in healthcare spending and demand for Covid tests led to sharp gains in the stock prices of pathology lab firms over the last year. As the new cases fall, listed firms are looking for new sources of growth from non-Covid streams to fuel investor interest. 

Some of the companies have acquired small players last year to move into new fields. Both Metropolis and Dr. Lal Path Labs are down 45% and 37% from their 52-week highs of ₹3,579 and ₹4,245, respectively.

Hinduja Global Solutions rises on contract win 

The subsidiary of the business-process management firm, Hinduja Global Solutions UK has won a contract from the UK Health Security Agency to provide critical customer support to UK citizens for an initial period of 2 years. The contract is reportedly worth around ₹2,100 crore.

The contract will assist with future contact-tracing needs and other health security risks such as a large flu outbreak or a new pandemic. This is the biggest-ever win in the public sector for the company and is likely to employ over 2,000 people in the work-from-home model in the UK.

IPO Corner

According to reports, India’s largest life insurer LIC expects 75 lakh to 1 crore retail investors including policyholders to participate in its IPO. Retail investors are reportedly expected to contribute around ₹25,000 crore, which could be the largest ever non-institutional participation in India. The average size of an LIC IPO application is expected to be between ₹30,000 and ₹40,000. 

Good to know

What is equity dilution?

Dilution is the reduction in the ownership percentage of existing shareholders in a company at the time of issue of new shares. For instance, assume that a company issues 100 shares to 100 independent shareholders, with each shareholder having 1% ownership in the company. If the company issues 100 more shares to 100 other shareholders, the ownership of each shareholder reduces to 0.5%. Such a share issue is referred to as dilutive, since it dilutes the ownership percentage of the shareholders.

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