Business news highlights: Indian Overseas Bank hikes lending rate on overnight & 1-month tenures by 5 bps each

Britain said on Monday that US firms ServiceNow, CyrusOne, CloudHQ and CoreWeave would invest a combined 6.3 billion pounds ($8.2 billion) in UK data centre technology. The announcement comes as British Prime Minister Keir Starmer hosts global business leaders at a major investment summit in London. (Reuters)

India is on track to become the world’s largest gaming market by 2028, overtaking China, Harsh Jain, the co-founder of Dream Sports, the parent firm of fantasy sports major Dream11, has said. However, despite having 500 million gamers, the country contributes less than a percent to global gaming revenue — a disparity Jain said needs immediate action. (Read More)

Stock markets held below last month's record highs on Monday, while the Chinese yuan and oil prices weakened as China's broad economic stimulus promises at the weekend failed to inspire investors across the globe. US stock index futures were mixed ahead of a week packed with third-quarter earnings that include the likes of Goldman Sachs, Morgan Stanley and Netflix. Europe's broad stock index was little moved as investors bided time before a European Central Bank rate decision on Thursday. (Reuters)

Swedish telecom gear maker Ericsson has received a new multi-billion dollar contract for selling 5G equipment from India's Bharti Airtel, two sources familiar with the matter said. This comes after Ericsson got part of a $3.6 billion contract last month for selling 5G equipment to India's Vodafone Idea. It shared the contract with Nokia and Samsung. The new contracts are expected to boost Ericsson's revenue next year after seeing a big fall in contracts from India in the first half of the year. (Reuters)

Indian Overseas Bank hikes lending rate on overnight & 1-month tenures by 5 bps each

US-based academics Daron Acemoglu, Simon Johnson and James Robinson won the 2024 Nobel economics prize "for studies of how institutions are formed and affect prosperity", the Royal Swedish Academy of Sciences said on Monday. The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final prize to be given out this year and is worth 11 million Swedish crowns ($1.1 million). "Reducing the vast differences in income between countries is one of our time's greatest challenges. The laureates have demonstrated the importance of societal institutions for achieving this,” said Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences. "Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better," the award organisers added on their website. (Reuters)

Private equity players TPG and Blackstone are planning a joint bid for Canadian contact lens supplier Bausch + Lomb, Financial Times reported on October 14 citing people familiar with the matter. One Bloomberg estimate projected the sale to value Bausch + Lomb at over $13 billion, making the deal potentially one of the largest PE buyouts of 2024. Shares of Bausch + Lomb have risen by 10% in last one month, as reports of stake sale have started to gather steam. (Read More)

Arihant Capital has given a 'Subscribe for long term' rating to the issues, noting that Hyundai aims to establish itself as a significant player in the EV segment and has achieved one of the highest returns on net worth (RoNW) among its peers.

• We have received 38 applications for investment of Rs 4,121 crore in the third iteration of PLI scheme for white goods, says DPIIT Joint Secretary Sanjiv
• This PLI was for ACs and LEDs to increase domestic component from 25 to 75%
• With this new PLI value addition of 75-80 percent will be achieved by completion of period in 2028-29, says JS
• 43 percent of new applicants are MSME sector. This is not easy to get various applicants to join the scheme, says JS
• We have had multiple stakeholder consultation. We could identify five clusters, says JS
• All big manufacturers who had not participated in earlier scheme, we have been able to bring them. We had applicants from J&K and Odisha, says JS
• MNCs have come for the scheme this time. This will lead to investment of Rs 11,083 crore in plant and machinery, says JS

Coal India, which raised approximately Rs 15,200 crore in its 2010 IPO with an issue price of Rs 245, is one of the few government-backed companies currently trading at a 100% premium. (Read More)

Public offer of government-backed entities have also shown lackluster results. For example, LIC's IPO, the largest in India's history to date, has provided a modest return of just 2%, with its stock currently trading at Rs 967 per share compared to an issue price of Rs 949.

Significant examples of large IPOs that have failed to perform include Paytm (One97 Communications Ltd) and Reliance Power, both of which have consistently traded below their issue prices since their listings. Reliance Power, listed in 2008, is currently down 83% from its issue price, while Paytm's stock, initially priced at Rs 2,150, has not surpassed its listing price and now trades at around Rs 739 per share, representing a decline of approximately 65%.

Data shows that some of the country's largest IPOs, including Paytm and Reliance Power, as well as government-owned entities like GIC and New India Assurance, resulted in losses for investors.

This is the first initial public offering (IPO) of an automaker in over two decades, following the listing of Japanese carmaker Maruti Suzuki in 2003.

•  SBI Securities has given a 'Subscribe for Long Term' rating to Hyundai's IPO, citing the company's strong brand, popular models, advanced technology, and high export potential as key differentiators.
• "The capacity expansion at Talegaon will enable Hyundai Motor India Ltd. (HMIL) to increase both domestic and export volumes. At the upper price band of ₹1,960, HMIL is valued at 26.3x FY24 EPS," the firm added. (Read More)

• Around 40,000 applications have been submitted within just two weeks for 1,000 spots under Australia's new Working Holiday Maker visa program, Australian Assistant Minister for Immigration Matt Thistlethwaite announced on Monday.
• The visa, which allows Indians aged 18 to 30 to live, work, and study in Australia for up to 12 months, represents a significant step in strengthening ties between the two nations, Thistlethwaite said during the launch of the program.
• The visa ballot opened on October 1 and will close at the end of the month. Afterward, successful applicants will be randomly selected, with those chosen able to begin their stay in Australia early next year, he added.

Plan for market coupling of power exchanges is on; committed to implementing it, says Power Secretary

According to a report by Livemint, India's trade practices watchdog is expected to issue an order against WhatsApp for violating the country’s competition laws. The business news portal reported that the Competition Commission of India (CCI) has raised concerns over a controversial update to WhatsApp's privacy policy and service terms. The CCI's order may also include a penalty.

HCC gets Letter of Acceptance (LoA) for a project worth Rs 1,032 crore from Maharashtra State Road Development Corporation (MSRDC)

"We expect limited listing gains to this IPO, however expect HMIL to deliver healthy double-digit portfolio returns over medium to long term," the analysts at ICICI securities said.

The Grey Market Premium (GMP) for Hyundai India's IPO is currently trading around Rs 65 in the unlisted market, marking a sharp decline of nearly 90% from the Rs 570 GMP recorded in the last week of September. Despite this drop, analysts view the IPO as a long-term play and anticipate it to generate strong returns over time.

Analysts at ICICI Securities have assigned a 'Subscribe' rating to the Hyundai IPO, citing steady growth prospects supported by industry tailwinds, strong financials, and a solid lineup of SUV products.

Chinese and European automakers are launching new models at the Paris auto show on Monday, with both heavily focusing on their electric ranges, even as demand slows and the EU gears up to impose tariffs on Chinese-made EVs later this month. (Reuters)

Hyundai's IPO has seen a significant drop in its Grey Market Premium (GMP) ahead of the public launch on October 15. Despite this, analysts are optimistic that the IPO will deliver robust double-digit returns over the medium to long term.

A second Donald Trump presidency could lead to significantly lower economic growth in several Asian economies, with China, South Korea and Vietnam particularly affected, ratings agency Fitch said on Monday. Under its worst-case scenario, real GDP in those three countries in 2028 could be 1% or more below Fitch's current expectations, if U.S. trade protectionism increases sharply.The former president, as part of his pitch to voters in the knife-edge election, has floated plans for blanket tariffs of 10% to 20% on virtually all imports as well as tariffs of 60% or more on goods from China. (Reuters)

Poland's biggest e-commerce platform Allegro said on Monday its CEO Roy Perticucci would step down on June 26, 2025. Perticucci, who has been at Allegro's helm since September 2022, will move from his role as the Allegro Group CEO to a special advisor, the company said in a statement. (reuters)

EV sales in Europe cannot be compared to the growth in India as the volumes are extremely high in other countries. For the Indian EV market, we remain optimistic for the long term, says SiAM president Shailesh Chandra

Don't see immediate revival of the small car market as buyers are increasing upgrading to SUVs. Also, Pre-owned car market has impacted entry-level cars says SIAM President Shailesh Chandra

Petroleum & natural gas minister Hardeep Singh Puri- "I am working on a roadmap for post 20percent blending of ethanol in petrol by 2025."

Temasek-backed meat and seafood startup Licious has reached a deal to buy out My Chicken and More, a Bengaluru-based company that runs a chain of offline stores, for Rs 150-200 crore, people aware of the developments told Moneycontrol. The deal will be a mix of cash and equity, with an earnout component attached to it. (Read More)

PV wholesales down by 1.4 percent YOY at 3,56,752 units in September 2024, shows SIAM data

• “We will blend 20 percent of ethanol with petrol by 2025, barring some unforeseen occurrence.”
• “Today, I don't agonize about availability of feedstock. In a large country like India, you can have any kind of problem anywhere but does your policy have the inherent responsiveness to shift when you face a problem.”
• “This is the classic story of ethanol blending, where you shift from one feed to another feed.”

Wholesale inflation rises to 1.84% in September compared with 1.31% in the previous month

Oil minister Hardeep Singh Puri is speaking at the 12th Bio Energy Summit. Addressing the event, Puri said, "Prime Minister Narendra Modi made sure the Indian consumer is insulated from the turbulence in global markets." He also said that "this becomes very necessary when you look at the fact that our import dependence for crude is still very high."

Hyundai India's public offer will rank as the second-largest IPO globally this year in terms of funds raised, trailing only Lineage Inc's $5.1 billion IPO in the US in July.

If successful, Hyundai India’s IPO will become the largest in India, surpassing the previous record set by Life Insurance Corporation of India in 2022, which raised $2.5 billion.

Discussions revolving around the resumption of direct passenger flights between India and China have gained momentum, as the Chinese government is eager to restart operations, multiple government officials told Moneycontrol. “The Chinese government has requested another meeting with its Indian counterpart. Talks are in progress for a fresh representation to restart direct flights and strengthen bilateral ties,” an official said. (Read More)

"With the funds raised by the IPO, Hyundai Motor would secure a sizable investment capacity to close the market share gap with India's No.1 player Maruti Suzuki as the South Korea automaker would likely invest to expand its production in India," said Shin Yoon-chul, an analyst at Kiwoom Securities. He added that the IPO seemed timely as the auto sector has been leading the Indian stock market in terms of performance.

The Shapoorji Pallonji (SP) Group, recently downgraded by CARE Ratings from "Care BB" to "Care BB-" with a negative outlook, is witnessing an unexpected rise in demand for its bonds, senior bankers told Moneycontrol. This rise follows the appointment of Noel Tata as the chairman of Tata Trusts, which holds a 66 percent stake in Tata Sons, the unlisted holding company of the Tata group. (Read More)

Hyundai India will commence taking orders for its $3.3 billion initial public offering in Mumbai on Monday, as stated in the company’s regulatory filings. This offering will be the largest share offering in the country’s history and the second-largest IPO globally in 2024.

“Heavy reliance on AI can lead to concentration risk, when small number of technology providers dominate the market. This could amplify systemic risk,” says Shaktikanta Das

“Heavy reliance on AI can lead to concentration risk, when small number of technology providers dominate the market. This could amplify systemic risk,” says Shaktikanta Das

“In the modern world with deep social media presence, and vast access to online banking with money transfer happening in seconds, rumours and misinformation can spread very quickly and can cause liquidity stress. Bank have to remain alert on social media space and strengthen their liquidity buffers,” says Shaktikanta Das

RBI Governor Shaktikanta Das is addressing the 'Central Banking at Crossroads' conference in Delhi. "The divergence in global monetary policies, the tightening in some economies and easing some economies, and pause in some economies can be lead to volatility in capital flows and exchange rates, which may disrupt financial stability," says Das

Hyundai will not issue new shares in the IPO, during which its South Korean parent will sell up to 17.5% of its stake in the wholly-owned subsidiary, valuing it at up to $19 billion.

The IPO reflects that India’s booming capital markets show no signs of cooling, with 260 companies raising over $9 billion so far in 2024, according to LSEG data. The year-to-date volume has already exceeded the total of $7.42 billion raised last year.

The book-building issue is expected to be listed on October 22, 2024, following the ‘T+3’ listing rule.

Hyundai raised Rs 8,315.28 crore from anchor investors by allotting 42,424,890 shares. These shares are subject to lock-in periods, with 50% locked until November 17, 2024, and the remaining locked until January 16, 2025.

The IPO allocation is divided into categories, with up to 50% reserved for Qualified Institutional Buyers (QIBs), at least 35% for Retail Individual Investors (RIIs), and 15% for Non-Institutional Investors (NIIs).

Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, JP Morgan India Private Limited, and Morgan Stanley India Company Pvt Ltd have been designated as the lead managers for the public offer.

KFin Technologies has been appointed as the official registrar for the book-building issue.

Hyundai's stock performance following the IPO will be affected by broader market conditions. The automotive sector is currently grappling with inventory build-ups and a slowdown in demand, which could impact stock valuation.

Hyundai Motor India is a significant player in the domestic passenger vehicle market, operating in a highly competitive landscape alongside Tata Motors, Maruti Suzuki, and Mahindra & Mahindra. The competition has further intensified with the entry of new players such as Kia Motors and MG.

The mega public offer of Hyundai India is set to list on the D-Street on October 22 before Diwali week.

The basis of allotment will be finalised on October 18, with refunds and the credit of shares to Demat accounts scheduled for October 21.

High-net-worth individuals (HNIs) can bid for a minimum of 105 shares, with larger bids potentially surpassing Rs 1 million.

Investors can place bids for a minimum of 7 shares, with the minimum retail investment set at Rs 13,720 and the maximum capped at Rs 192,080.

The IPO is a complete Offer for Sale (OFS) of 142,194,700 shares, reducing Hyundai Motor Company's stake from 100% to 82.50% after the IPO.

The Rs 27,870 crore IPO of Hyundai India will be listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), with a price band set between Rs 1,865 and Rs 1,960 per equity share.

Chinese stocks climbed in early trading on Monday after the finance ministry over the weekend promised new measures to support the property sector and hinted at greater government borrowing to shore up the economy.

The CSI 300 Index rose as much as 1.4% after capping its worst week since late July on Friday. A gauge of Chinese shares listed in Hong Kong reversed an early loss of 1.1%.

Hyundai India will start taking orders for its $3.3 billion initial public offering in Mumbai on Monday, the company said in regulatory filings, a deal that will be the country's largest ever share offering and world's second biggest IPO in 2024.

The IPO shows that India's red hot capital markets show no sign of cooling, with 260 companies having raised more than $9 billion so far in 2024, according to LSEG data. The year-to-date volume has already surpassed the $7.42 billion total raised last year.

Hyundai will not issue new shares in the IPO, in which its South Korean parent will sell up to 17.5% of its stake in the wholly-owned unit that will be valued at up to $19 billion.

At that size, Hyundai India will make up about 40% of its parent company Hyundai Motor's market capitalisation.

There will be 142,194,700 shares on offer in a price band of 1,865 to 1,960 rupees, according to the filings, and the deal will be the first time Hyundai is listed outside of its South Korean home market.

Institutions can bid for the stock from Monday while retail and other investors can place orders on Tuesday and Wednesday. The stock will begin trading in Mumbai on Oct. 22, the regulatory filings show.

Pranik Logistics' subscription for Rs 22.47 crore initial public offering will close today (October 14). The IPO had opened for subscription on October 10 and the allotment is likely to be finalized on October 15.