Street signs: Tech stocks buyback, Bengaluru real estate, and more

Tech stocks jump-start on buyback dreams

After sharp underperformance this year, information technology (IT) stocks finally seem to measure up. Last week, the Nifty IT Index jumped nearly 4 per cent, even as the Nifty50 Index gained only 1.7 per cent. Experts say valuation comfort and the buzz around large buybacks have jump-started interest in IT stocks. “We expect top-tier firms to announce buybacks while declaring their second-quarter numbers. Given the sharp correction in stock prices, this could be an opportune time. It could also provide a bottom for IT shares,” says an analyst. The Nifty IT Index is down 26 per cent year-to-date. By comparison, the Nifty is up over 1 per cent.

Investors have Bengaluru realtors in their line of sight

Notwithstanding the recent floods, listed property firms in Bengaluru are drawing investor attention to the residential real estate market in Asia’s Silicon Valley being on the cusp of a strong demand cycle. This is on the back of strong information technology (IT) hiring and salary increments in the IT sector. Moreover, a low inventory overhang and high affordability in Bengaluru allow for gradual and consistent price hikes in a robust demand environment, observe experts. Bengaluru – the second-largest residential real estate market in India - has been consistently clocking 45,000-60,000 unit sales over the past six/seven years, marginally above the 40,000-45,000 units in the Delhi-National Capital Region. Analysts say shares of companies exposed to the Bengaluru property market, such as Prestige Estates Projects, Brigade Enterprises, and Sobha, are likely to do well over the medium term.

Harsha Engineers’ grey market premium at 40%

Shares of Harsha Engineers International (HEIL) are changing hands at over 40 per cent premium in the grey market. The largest manufacturer of precision-bearing cages has set a price band of Rs 314-330 per share. Trades are happening at around Rs 470-475 per share ahead of its initial public offering, say people in the know. It opens for subscription on September 14 and concludes on September 16. The issue comprises Rs 455 crore worth of fresh fund-raise and a secondary share sale of Rs 300 crore. At the upper end of the price band, HEIL is valued at about Rs 3,000 crore. It manufactures brass, steel, and polyamide cages and stamped components.