#1. Primary market sees 37 companies launch IPOs in 2024, highest first half in 17 years
During the first half of 2024, 37 firm from diverse sectors like co-working space, furniture retailing and online ticket booking have tapped the primary market to raise around Rs 32,000 crore, the Business Standard reported, citing Prime Database. In the peak bull market of 2007, 54 companies had raised Rs 20,833 crore. In terms of funds raised, this year’s tally is the second-best after 2022, when 16 firms raised Rs 40,311 crore, led by the biggest-ever IPO of Life Insurance Corporation of India.
Why it’s important: It’s a measure of India’s bright economic prospects that even election uncertainty failed to dent investor enthusiasm. There seems to be strong liquidity support from both local and overseas investors.
#2. High stock valuations see business promoters offload stake worth Rs 33,000 crore
Promoters of over 200 Indian companies have cumulatively sold stock worth more than Rs 33,000 crore in the past two months, the Economic Times reported. In 2024 so far, local and foreign promoters have already sold shares worth nearly Rs 65,000 crore, compared with the record Rs 78,000 crore sold in the entirety of the 2020 pandemic year.
Why it’s important: Stock valuations have become attractive enough for owners to book returns on part of the equity they hold. This year could set a new record in promoter stock dilution.
#3. Five public sector lenders plan qualified institutional placements to pare government stake
Five state-owned banks may sell shares through qualified institutional placements in the second half of 2024-25 to reduce the government’s stake to the maximum 75 percent permitted by the market regulator, the Mint reported. The public sector banks have also sought at least two years more from the regulator to raise public shareholding.
Why it’s important: The state-owned lenders could use the money to shore up their capital adequacy ratio, improve provisioning, step up lending and write off bad debts.
#4. Alleged frontrunning in Quant Mutual Fund can shake investor confidence, experts fear
The suspected front-running in Quant Mutual Fund and the crackdown by the Securities and Exchange Board of India can shake investors’ confidence in the fast-growing mutual fund industry, the Hindu Businessline reported, citing experts. The regulator has conducted search and seizure operations at Quant offices in Mumbai and at the premises of suspected beneficiaries in Hyderabad.
Why it’s important: If the allegations are found to be true, experts fear they could undermine trust of investors who have shifted from traditional assets such as fixed deposits and saving accounts to mutual funds. The fears could be overblown SIP returns depend on market movement and not by misconduct of some participants.
#5. Regulator to consider raising entry barriers for stocks to be listed in derivatives segment
The Securities and Exchange Board of India will consider a proposal to tighten rules on the inclusion of stocks in the derivatives segment at its board meeting on June 27, the Economic Times reported. The regulator wants stocks that are part of the derivatives market to be more liquid and traded by a wide set of market participants to prevent manipulation and lower risks to the ecosystem.
Why it’s important: The regulator in recent times has already voiced concerns over excessive and risky bets on illiquid equity derivative contracts. It might tighten rules to prevent excessive speculation.
#6. Masdar, Macquarie and others mull buying 49 percent stake in Hygenco Green Energies
Several entities such as the United Arab Emirates’ Masdar (Abu Dhabi Future Energy Company), Asian Infrastructure Investment Bank and Australia’s Macquarie Group have shown interest in acquiring 49 percent stake in Gurugram-based green hydrogen manufacturer Hygenco Green Energies for an estimated equity value of around $400 million, the Mint reported.
Why it’s important: India’s initiative to tap ecofriendly energy sources such as green hydrogen has generated significant interest among global investors. The trend will continue as the country continues on its energy transition pathway.
#7. Government to discuss ways to keep power flowing in face of increasing heatwaves
The federal government has begun discussions on ways of ensuring that power projects, including those fueled by renewable energy, can function during the kind of heatwaves that have swept India this summer, with temperatures touch 50 degrees Celsius, the Economic Times reported. Equipment should be rated for higher ambient temperatures of above 40 degrees and have insulation that can withstand them without degrading, experts said.
Why it’s important: Increasing heatwaves are expected to become routine in India as the climate crisis deepens. Measures will have to be taken to ensure the power system keeps functioning in significantly higher temperatures.
#8. WeWork’s India exit unlikely to leave any dent on local co-working market
The exit of WeWork from its India unit is unlikely to have an impact on the country’s co-working real estate market, industry executives told the Business Standard. The company last week received approval from the Competition Commission of India to sell its entire 27.5 percent stake in the local unit to Real Trustee Advisory Company.
Why it’s important: As working culture undergoes rapid transformation worldwide, there is likely to be high demand for co-working space in India and investors would keen to enter this segment is the returns are high.
#9. Dutch tech investment firm Prosus writes off $493 investment in edtech startup Byju’s
The Netherlands-listed technology investment firm Prosus has written off its stake in embattled edtech firm Byju’s, multiplae business newspapers reported. Prosus wrote off the fair value of its nearly 10 percent stake due to the significant decrease in value for equity investors, it said in its annual report. This comes at a time when Prosus and other investors such as Peak XV and General Atlantic have mounted legal challenges against the Byju’s management.
Why it’s important: The meteoric rise and equally fast fall of Byju’s, once India’s most valuable startup, offers an object lesson in excessive investor exuberance and inability of the startup founders to adequately manage an entrepreneurial venture.
#10. Domestic automakers gear up to seize export opportunity in electric vehicles
Domestic automakers are grabbing the export opportunity presented by a growing preference for cleaner mobility in developed markets couple with government support to supply electric vehicles at competitive costs, the Economic Times reported. Maruti Suzuki is set to start shipments of its first electric SUV to Europe early next year, and Hero MotoCorp is readying for launch of its VIDA V1 electric scooter in France, Spain and the UK over the next few months. TVS Motor, which is exporting electric scooters to a few Asian countries, is preparing to head to the European Union.
Why it’s important: The global market for green mobility is expanding at a rapid clip and India’s automakers could leverage their expertise in producing cheaper vehicles to capture a share of the pie.
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