A round-up of the biggest articles from newspapers
Adani shares plummet after investment researcher alleges share rigging and fraud
Hindenburg Research, a US-based investment research firm, has alleged that the Adani Group had engaged in brazen stock manipulation and accounting fraud scheme. It has also accused the business house of improper use of offshore tax havens and flagged concerns about the group’s high debt. Investors in Adani group firms lost a whooping Rs 85,761 crore in market value as shares slumped. Adani Group denied the allegations and questioned its timing ahead of the follow-on public offer of its flagship company.
Why it’s important: Although there has been concerns over the high indebtedness of Adani companies, there has never been accusations of such large-scale share manipulation and wrongful use of tax havens. Adani may issue a more specific response to Hindenburg Research’s allegations.
Adani Enterprises raises Rs 5,985 crore from anchor investors ahead of FPO
Adani Enterprises has raised Rs 5,985 crore from anchor investors, including global funds, sovereign wealth funds and domestic insurers ahead of its Rs 20,000 crore follow-on public offer on January 27. The flagship of the Adani Group sold about 18.3 million shares at Rs 3,276 each to 33 institutional investors in a pre-issue share sale. Anchor investors will pay Rs 2,992 crore now and the remaining in one or more calls.
Why it’s important: The mammoth share sale by Adani Enterprises, the largest FPO in India, has got off to a good start despite fresh allegations share rigging and accounting irregularities. Whether retail investors are rattled by the allegations remains to be seen.
Tata Motors posts profits of Rs 3,000 crore, showing gains after seven long quarters
After posting losses for seven consecutive quarters, Tata Motors has reported a consolidated net profit of Rs 3,043 crore in the fiscal third quarter to December on the back of a strong order book, better semiconductor chip supply, tempered commodity prices and a better product mix. Volumes will continue to ramp up steadily, particularly for Jaguar Land Rover, the company said. Total income jumped 22.9 per cent year-on-year to Rs 89,618 crore. Expenses rose 17.4 per cent on an annualized basis to Rs 86,415 crore.
Why it’s important: The increased sales of the premium Jaguar and Land Rovers models have led to the good showing by the automaker. Smoother supply chains and better market conditions should keep the cheer up in subsequent quarters.
Early backers Accel and Tiger to exit Flipkart by selling shares worth $1.5 billion
Venture capital fund Accel Partners and New York-based investment firm Tiger Global are in discussions to sell their remaining stake in Flipkart, which together amounts to about 5 per cent, to its parent Walmart. The American retail firm could pay around $1.5 billion for this share purchase. Accel owns a little over 1 per cent stake and Tiger Global holds about 4 per cent. Once a deal is finalized, Walmart’s stake in Flipkart will increase from its current holding of 72 per cent.
Why it’s important: Two early backers of Flipkart are exiting because they have to return money to investors from funds that are reaching the end of the maturity cycle. The share sale despite a liquidity squeeze speaks positively of Flipkart.
Cricket body earns Rs 4,670 crore from five women premier league teams
The Board of Control for Cricket in India has secured a record Rs 4,669.99 crore by auctioning five franchises of the Women’s Premier League to Adani Group, Reliance, Diageo India, JSW-GMR joint venture and Indian NBFC company Capri Global. The franchises are auctioned for perpetuity and the cricketing body will receive the amount over 10 years. The five bidders snapped up the rights for Ahmedabad, Mumbai, Bengaluru, Delhi, and Lucknow. In total, 16 companies bid for the five franchises out of a pool of 10 cities.
Why it’s important: There is increasing interest in women’s cricket in India and companies want to cash in on that. Besides the brand value, these are viewed as trophy acquisitions as well.
Only one out of 10 derivative traders booked profits in 2021-22
Millions of investors have ventured into India’s derivatives market in recent years, but just one out of 10 of them made any profit, a new report showed. According to the Securities and Exchange Board of India, out of 4.52 million individual traders in futures and options in 2021-22, only 11 per cent made a profit. Out of the total participants, the number of individual active traders stood at 3.97 million (88 per cent). The sample size of 4.52 million was taken from the top 10 brokers accounting for around 67% of the overall individual client turnover in the equity F&O segment during 2021-22.
Why it’s important: The sharp growth in the number of participants in the F&O segment since 2019 was mainly due to young traders aged 20-30 years. They would need to be smarter market players.
PhonePe paid Rs 8,000 crore in tax for firm to relocate to India
PhonePe’s investors had to pay a high price to relocate to India, chief executive Sameer Nigam said. The digital payments firm’s decision to shift from Singapore has cost its investors Rs 8,000 crore in capital gains taxes. PhonePe, backed by Walmart and Tencent, also stands to lose the chance to offset $900 million of accumulated losses against future profits, as local tax authorities view the shift in domicile as a restructuring event.
Why it’s important: PhonePe shifted its domicile to India in October as it wanted to list its stock on domestic stock exchanges and create shareholder and ecosystem value locally, according to its chief. The change of domicile is rare corporate event.
Kishore Biyani resigns as executive chairman of Future Retail
Kishore Biyani has resigned as executive chairman and director of Future Retail and his resignation has been placed before the committee of creditors, as per the insolvency and bankruptcy code, the company said in a regulatory filing. Biyani’s resignation dated January 23 was received by the resolution professional the next day via email.
Why it’s important: Biyani is considered a pioneer of modern retail in India. He entered the domestic market in 1987 with a company called Manz Wear, which was later renamed Pantaloons. His Big Bazaar supermarkets also became a household name. Not everybody can exit in a blaze of glory.
Enforcement Directorate against decriminalization of money laundering provisions
The Enforcement Directorate has opposed a move to decriminalize provisions in the Prevention of Money Laundering Act (PMLA), warning that this will curtail the agency’s powers and impede its efficiency. The agency that investigates financial crimes has asked the finance ministry to exclude PMLA provisions from the broader effort to decriminalize offences. There were six provisions under PMLA, which have been tentatively selected for decriminalization. The finance ministry is now reconsidering some of the changes.
Why it’s important: There has been a trend in the central government to decriminalize provisions in a clutch of law to improve ease of doing business. Their efficacy in improving compliance is yet unknown.
President Draupadi Murmu points to climate challenges in speech on eve of Republic Day
In her maiden speech on the eve of the Republic Day, President Draupadi Murmu underlined the challenges of global warming and climate change facing the planet, and how India’s stance could shape the global approach while it holds the G20 Presidency. She also drew upon the dilemma faced by the developing world, the need to uplift more people from poverty through economic growth, which is inevitably tied to fossil fuels, and how India was still making big moves on renewable energy.
Why it’s important: President Murmu’s speech once again underlined that India wants to make the most out of the G20 presidency to advance its agenda of climate change and digital transformations.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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