In today’s briefing:
- Nifty 50 and the RBI Rate Decision: History Has a Pattern
- Aegis Vopak IPO: Anemic Demand
- Schloss Bangalore IPO Trading – Decent Anchor; Muted Overall Demand
- Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short
Nifty 50 and the RBI Rate Decision: History Has a Pattern
- The Reserve Bank of India (RBI) is set to announce a monetary policy decision on Friday, 6 June 2025.
- Market Expectations: The consensus anticipates a 25-basis-point rate cut, lowering the rate from currently 6.00% to 5.75%. Historically, one in four RBI rate decisions is a surprise to the market.
- This Insight investigates past market behavior during comparable RBI policy announcements, unearthing a surprising statistic about how the Nifty 50 might react to June’s decision, regardless of the outcome.
Aegis Vopak IPO: Anemic Demand
- Aegis Vopak Terminals Ltd (1902844D IN) raised about US$328m in its upcoming India IPO.
- It is the largest Indian third-party owner and operator (in terms of storage capacity) of tank storage terminals for liquified petroleum gas (LPG) and liquid products.
- In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we talk about the trading dynamics.
Schloss Bangalore IPO Trading – Decent Anchor; Muted Overall Demand
- Schloss Bangalore Ltd (SCHBL IN) raised about US$400m in its India IPO.
- It is a luxury hospitality company which owns, operates, manages and develops luxury hotels and resorts under ‘The Leela’ brand, through direct ownership and hotel management agreements with third-party owners.
- We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.
Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short
- The Canara Bank (CBK IN) vs. LIC Housing Finance (LICHF IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- The relative value opportunity can be implemented through stocks, derivatives, or as relative over-/underweights in a long only context.
- This Insight provides a target return and discusses trade setup and risk management strategies.
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