DRIPPING RED
Floaters are supposed to help you swim, right? What if they make you sink? Traders have found out that floating rate bonds can actually sink their portfolios. We told you earlier that appeals to the corridors of power have been made for some relief, though there doesn’t seem to be an enthusiastic response. So some took it upon themselves to send a message through the auctions of bonds on Friday. But this has led to some investors being forced to chew on these floaters courtesy their role in the market. Primary dealers got an unwanted pile of floaters dumped on them that day. We hear that the losses on their floating rate bonds far exceeds the compensation by way of underwriting commission they receive, perhaps even three times more. As one dealer put it, “we are in a pie-eating contest that should have ended long ago. We are already sick.”.
THE ANT-INVESTORS
NBFC stocks are not quite the rage at this point in time, but this one sure is on fire, having almost doubled in value over the last three weeks. Low liquidity is one of the factors driving the upswing, but the bigger reason is the roster of investors who have taken a shine for the stock. The NBFC is coming out with a preferential issue to raise funds more than three times its market capitalisation. Subscribers to the issue include a self-proclaimed spotter of hidden gems in small and mid caps, a soft spoken sage-like portfolio manager, and the founder of Mumbai-based 'Maximum' Capital. The dramatic rerating of the stock comes as a surprise to some of the old hands in the market, considering that not many moons ago, this NBFC, in its previous avatar, had gotten into trouble with the regulator which barred the firm from capital markets, and impounded its assets as well as those of the previous directors. With a new promoter in charge, the abovementioned investors seem to be betting on a radical transformation. The plan is to get into bill discounting for traders and firms dealing in the steel products, which is an underserved market at present. This will certainly help the customers of the NBFC's new owner and at the same time also give access to a wider clientele through the new owner's distributors, who deal with many other vendors as well.
A sound business model no doubt, but more than that, it is the new owner's track record of turning around near bankrupt companies that has got the investors excited, per the chatter on the street.
BRAND NEW BET
Word has it that a top private equity player may be hungry for more in the industrials space and wants to invest once again in a firm which had struck a mega outbound deal a few years back. The firm wanted to de-risk itself back then and along came the PE player along with a second investor and both got on board. So what could be the trigger for this fresh bet in the making? Any guesses?
LIGHTS, STOCK, ACTION
A big-bang deal in the media & entertainment space which was finally sealed post various crests and troughs in terms of key investor stances is gradually getting its laundry list of regulatory approvals. And this progress seems to have caught the fancy of a veteran investor. We hear this investor has been lapping up shares even as the stock has perked up in recent weeks. Next up in the list for requisite nods is the anti-monopoly watchdog. So is a green signal likely again?
PUBLIC SECRET
This diversified conglomerate has always strived hard to plug leaks. While it may work well in its own legacy firms, getting employees to stay mum when they are part of an acquired target is tough. And that’s exactly what seems to be happening in a ‘high-flying’ segment. While there have been little leaks from a group company in the same segment, unfortunately for the group, a lot of leaks continues from its latest buyout. So much so that the target firm had to come up with a circular to remind the employees that they have to adhere to the group’s code of conduct. Alas, the circular itself made its way to social media in a few hours. So much for secrecy!
IT ISN’T B2C, STUPID!
When a new telecom player entered the scene, there was much discussion about the existing players losing their market share. The concerns were surrounding the disruption in the B2C segment. But our sources tell us that we need to look elsewhere, in the B2B segment. Incumbents may not be worried about the B2C segment at all. They may simply not want to give up the big business that is coming in building private networks for huge infrastructural facilities such as the ports and airports. Look at what is happening in China, to get a peek into the future. According to ABI Research, last year, companies building their private networks for private and government-owned facilities made a cool $1.2 billion in revenues. True, it doesn’t look like much, maybe around a tenth of the annual revenues of one of the largest telcos in India, but remember that this is just the beginning. By 2025, or three years from now, the network builders’ revenue is expected to go up by more than 4x to $5 billion.
HUSH-HUSH BANK
It's quite strange, but true. Recently, the story of a banker who rose from humble beginnings to become an assistant general manager in one of the country's top government banks hit social media and immediately caught public attention. When scribes approached the bank seeking its permission to tell the person's story to readers, the bank not only expressed reluctance to participate but even ordered the official not to talk to the press saying the official is not authorised to talk to media. This, despite the fact that the whole saga was a 'positive story' for the bank and would have served as an inspiring tale for many other aspiring professionals from similar backgrounds. Reporters were puzzled to see the bank's response. Someone jealous at the sarkari bank who doesn't want this hardworking official to get publicity? Beats us!
PEP TALK CURE
Poor patients not receiving adequate treatment in country’s public hospitals-including the ones run by the Centre in the national capital- is nothing new. But a video of a woman delivering outside a hospital for want of a timely bed inside the hospital recently went viral, leaving health policy makers red-faced. Perhaps taking a cue that the hospital and health administrators needed a quick boosting of morale, a senior bureaucrat in another ministry shot a letter praising the hospital. He had received top-class treatment very conveniently at the hospital without throwing his weight around, he wrote in a two-page long letter to the health secretary this week. It is yet to be clear if the letter indeed served the purpose and babus felt any better but many in the department were heard joking that the bureaucrat might be interested in getting a transfer there.
SHARING THE SPOTLIGHT
Normally, you only see corporate honchos edging out contemporaries to be in the spotlight, be it an outgoing and incoming CEO or corporate pairs of any other kind. But it’s a different story in one of the country’s largest AMCs, which saw its star fund manager quit some days ago. Buzz is now there is a “pehle aap, pehle aap” going on between the CIO and the CEO to hog the media spotlight; the CIO does not want to be in the focus so the fund can put the new team under the spotlight to aid a smooth transition. The CEO feels that the star manager can hog the limelight and the transition talk can wait for a bit. The result: media interactions have been pushed for another day with both sides going into a ‘silent period’.
VACCINE SNUB?
The buzz is that a top vaccine maker got a cold shoulder from officials while discussions began on India’s need for developing a vaccine against Monkeypox. While a few domestic players were called for discussing the roadmap of a vaccine development, a ‘top player’ didn’t get the invite.
When asked for the reason behind what appears to be an the ‘intentional omission’, a little birdie told us that the current outbreak of the disease may or may not need a drug for everyone and hence, engaging with smaller players appeared to be a viable option.
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