The IPO sale is still on: 7 companies plan to raise over Rs 19,000 crore in December
At least seven companies plan to launch their IPOs in December to raise more than Rs 19,000 crore, The Economic Times reported.
Who they are: Star Health, CE Info Systems, RateGain Travel, Anand Rathi Wealth will launch their IPOs next week.
Others on the list include Adani Wilmer, Go First Airlines and Tega Industries.
The big two offers are Star Health and Adani Wilmar to raise Rs 7,250 crore and Rs 4,500 crore, respectively.
Passenger vehicle sector may lose $5 billion in revenue this fiscal
The country’s passenger vehicle industry is set to lose 500,000-600,000 units in production, The Economic Times reported.
Why it’s important: Industry executives say that this will cost more than $5 billion in revenue this fiscal year.
The main reason for the big loss is the global shortage of semiconductors.
Automakers have suffered a production loss of 300,000-350,000 units in April- October period.
Now, the chip's supply has become better with Malaysia resuming supplies.
However, the auto industry is expected to lose 250,000-300,000 units in the second half of this fiscal year 2022.
Maruti Suzuki is set to lose about 20% of its annual output, resulting in a revenue loss of $2.2 billion.
Angel networks launch funds for tax benefit, smoother operations
Angel investor networks are launching funds to get tax relief while complying with regulations, Mint reported.
Why it’s important: The move is to get the additional advantage of making their investment and divestment processes smooth with the structure that a fund permits.
In the past two months, three angel networks have applied to the regulator to launch AIFs.
Mumbai Angels, WeFounderCircle and Venture Catalysts have applied to launch alternative investment funds to invest in the same ecosystem in the past two months.
The advantage of launching a fund is the relief it offers from Section 56 (2) (viib), or the so-called angel tax.
The operational reasons are if an angel network could launch its angel fund for the ease of operations that the network offers.
upGrad to buy Australia’s largest study-abroad company
Edtech firm upGrad will buy a 100% stake in Australia’s largest study-abroad company Global Study Partners for $16 million, Mint reported.
Why it’s important: This will make the first overseas acquisition for the startup.
upGrad said it will invest $10 million more in Global Study Partners for its growth.
It said the acquisition will enhance its foray into the fast-growing study-abroad segment.
Global Study Partners, founded in 2015, has a network of more than 600 institutions in countries such as Australia, the UK, Canada and the US.
Ronnie Screwvala, chairperson and co-founder of upGrad, said: “We span the entire gamut of a learner’s need from the age of 18 to 50 and in that, study abroad is a key growth initiative for us; not just out of India, which is one of the two largest markets, but also for our learners internationally.”
Govt to relax lock-in period for NINL sale
The Centre has conceded most of the demands of potential buyers of Neelachal Ispat Nigam Ltd (NINL), Business Standard reported.
Why it’s important: The main demand was lowering the lock-in period for the sale of assets to one year.
The demand also includes allowing the new buyer to undertake the amalgamation of an SPV into NINL.
But the lock-in restriction for the sale of land and mining leases would continue to be three years.
The employee retention clause has also been set at one year.
The NINL privatisation is at an advanced stage and is expected to be completed in the ongoing financial year.
‘For FIIs, India becoming less and less attractive’
Sunil Tirumalai, executive director, India equity strategist, UBS Securities, in an interview with Business Standard explains why foreign portfolio investors have turned cautious on India.
What he says: Covid-19 impacted the unorganised or the informal economy but the listed space has largely benefited.
UBS is fairly cautious on the Indian market since June 2021.
At a regional level, UBS has had an ‘underweight’ stance on India.
There are a few things now, which are beginning to go against India.
One is commodity costs. Gross margins are the lowest in at least five to six years. In the past six months, India has underperformed on earnings upgrades.
The Indian market has outperformed other EMs.
The repeal of farm laws has taken some sheen off a reformist image the Centre had built.
The last major buying by FIIs happened in March.
For an investor, who has the option to choose across markets, India is becoming less and less attractive.
In the overall global portfolio, India’s weighting has come down in the past seven months.
Sensex valuation hits lowest level in over 15 months
The valuation of the BSE Sensex, or the price-to-earnings (P/E) multiple relating to the 30 companies comprising the index, has declined to its lowest level in over a year, Business Standard reported.
Why it’s important: This is because of a surge in corporate profitability in the last two quarters, leading to an increase in earnings per share, and weakness in the market.
The index is trading at a trailing P/E multiple of 26.8, the lowest since August last year.
In comparison, the index underlying EPS reached an all-time high of Rs 2,136 at the end of H1FY22.
The current P/E multiple is only 4 per cent higher than Sensex's five-year average earnings multiple of 25.8 and around 20 per cent higher than its 10-year average earnings multiple of 22.2.
In recent weeks, many foreign brokerages went underweight on Indian equity, citing higher valuations here and lower ones in other emerging markets such as China.
Nearly 33% of India’s medical devices capacity lying unused
Indian medical device makers are now struggling with idle capacity, Business Standard reported.
Why it’s important: This is after the country ramped up production to meet the steep demand spike during the Covid-19 pandemic.
Around a third of the installed capacity, especially for consumables, disposables, small-ticket electronic items, etc., is lying unutilised.
India used to produce just 6.24 million pieces of PPE kits per annum before the pandemic, but by June this was ramped up to 233.87 million pieces per annum.
India used to make only 3,360 ventilators per year earlier but now makes over 700,000 per year.In the case of masks, the increase has been from 313.6 million pieces per annum to 3.55 billion pieces a year.