Auto, PSU bank stocks to be watched

Auto stocks will be in spotlight after release of monthly sales data on 1 September 2019. Mahindra & Mahindra (M&M) announced its total auto sales fell 25% to 36,085 units in August 2019 over August 2018. M&M's Farm Equipment Sector (FES) announced its total tractor sales fell 17% to 14,817 units in August 2019 over August 2018.

M&M said the company has signed a Share Subscription and Shareholder Agreement for subscribing upto 55% of the equity share capital of Meru Travel Solutions in tranches. Meru was one of the first radio taxi operators in the ride hail segment.

Maruti Suzuki India said its total sales fell 32.7% to 1.06 lakh units in August 2019 over August 2018.

Tata Motors announced its sales in the domestic & international market, stood at 32,343 vehicles in August 2019 compared to 62,688 units during August 2018.

Public sector bank stocks will be in focus after the government unveiled mega merger of state-run banks. In a press briefing after market hours on Friday, 30 August 2019, finance minister announced that Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India will be merged. The combined entity will be second largest PSU bank in India with business of Rs 17.94 lakh crore. It will have second largest banking network in India with 11,437 branches.

Union Bank of India, Andhra Bank and Corporation Bank will be also merged. The entity will be fifth largest public sector bank with business of Rs 14.59 lakh crore. Canara bank and Syndicate Bank will be merged. The entity will be fourth largest public sector bank with business of Rs 15.20 lakh crore. Finance minister also announced that Indian Bank and Allahabad Bank will be merged. The entity will be seventh largest public sector bank with business of Rs 8.08 lakh crore.

In place of fragmented lending capacity with 27 public sector banks in 2017, now there will be 12 public sector banks post the latest round of consolidation of PSU banks. The consolidation of public sector banks will give them scale, FM said.

L&T said that the Transportation Infrastructure and Buildings & Factories businesses of L&T Construction have secured a project from the Navi Mumbai International Airport Private (NMIAPL) for the Engineering, Procurement and Construction of the greenfield Navi Mumbai International Airport at Navi Mumbai.

Yes Bank announced after market hours on Friday, 30 August 2019, that it will raise the authorised share capital by increasing the equity shares to 450 crore equity shares of Rs 2 each, aggregating to Rs 900 crore from the current 300 crore equity shares of Rs 2 each that aggregates to Rs 600 crore. The preference shares would be kept constant at two crore shares of Rs 100 each aggregating to Rs 200 crore. The proposal is subject to requisite approvals.

Dewan Housing Finance Corporation (DHFL) said its board approved the plan to convert the whole or part of its debt into shares. The board also approved raising the authorised share capital from Rs 828 crore to Rs 1090.39 crore. Among other decisions, the DHFL board also approved availing additional credit facilities based on the existing borrowing limits and disposal of whole or part of the undertakings or assets of the company. The announcement was made after market hours on 30 August 2019.

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