IPOs worth Rs 770 billion put on hold due to Ukraine war
Indian firms are putting on the backburner initial public offering plans worth at least Rs 770 billion due to the war in Ukraine. Some 51 companies planned to raise this total amount after receiving the go-ahead from the markets regulator, according to Prime Database. The sum does not include 44 companies, including LIC, that have filed draft documents but are yet to receive clearance.
Why it’s important: The war in Europe has roiled the stock market and soured investor sentiment. This scenario is expected to continue at least till June unless the conflict ends. The volatility in the equity markets is likely to continue, especially due to India’s dependence on imported crude oil, which is soaring.
Vikram Limaye opts out of second term as NSE chief
Despite a successful stint at the National Stock Exchange, Vikram Limaye has decided not to seek reappointment as managing director and chief executive officer after his term ends on July 16 this year. Limaye had taken charge in July 2017, seven months after the abrupt departure of Chitra Ramkrishna amid allegations of wrongdoing.
Why it’s important: India’s largest bourse is battling mistrust as investigators probe charges of unequal access to the exchange’s trading system during Ramkrishna’s tenure. Limaye’s decision could push it into a period of uncertainty and delay its plans of an initial public offering.
Government to relax norms for asset sale at BSNL, MTNL
After failing to attract bids for assets at state-run BSNL and MTNL, the central government is seeking expert advice on relaxing some norms as it readies to restart the auction to sell non-core assets of the telecom firms. The Department of Investment and Public Asset Management had listed six properties of BSNL and MTNL for sale, but the auction failed to generate adequate interest.
Why it’s important: The monetization of six properties of the two telecom giants was part of the revival package announced by the central government in 2019, and the department of telecom was expecting Rs 30 billion from sale of prime real estate in Mumbai.
Tata Sons may infuse additional $500 million in online retail initiative
Tata Digital has sought additional funds of $500 million from holding company Tata Sons to support growth plans of its ambitious digital retail initiative, as negotiations with global investors are delayed because of geopolitical tensions. The wholly owned subsidiary has sought working capital funds in recent weeks.
Why it’s important: Tata Digital needs to expand aggressively to take on entrenched incumbents like Amazon and Flipkart, besides new entrant Jio Platforms. Its retail app is currently being tested by employees.
Swiggy launches process to raise $1 billion through IPO
Popular food delivery startup Swiggy has launched the process to raise $1 billion (Rs76.9 billion) through an initial public offering by hiring investment banks JP Morgan and ICICI Securities as lead managers. Merchant banks will be hired later to run the process. The IPO is likely to hit the market by the end of financial year 2022-23 that begins in April.
Why it’s important: Swiggy is one of India’s largest unicorns with a valuation of some $10.7 billion. The timing of its IPO will be crucial as some tech and ecommerce startups that listed last year have seen their share prices plunge after going public.
Court refuses to admit Amazon plea on Reliance takeover of Future stores
The Delhi High Court has refused to entertain a plea by Amazon against Reliance Industries taking over hundreds of stores run by the Future Group. Amazon’s lawyer cited media reports on Reliance closing some 400 supermarkets run by Future Retail.
Why it’s important: The American e-commerce giant has been fighting cases in courts and tribunals to block an asset sale deal between Future Retail and Reliance Industries. Reliance has in recent days taken over hundreds of Futures supermarkets on nonpayment of rent.
Soaring oil prices weigh heavily on investor sentiment
The skyrocketing prices of crude oil has dampened investor sentiment. Although India’s benchmark indices managed to stay in the green on Tuesday after four days of heavy losses, analysts said surging oil prices will continue to act as a strong headwind for the market.
Why it’s important: Credit Suisse has downgraded the Indian markets to underweight from overweight due to higher crude oil prices that touched nearly $140 a barrel on Monday. Since India depends heavily on imported crude, higher prices are expected to hurt the current account and add to inflationary pressures.
Shareholders of Dish TV reject statement of accounts
A day after being prodded by the capital markets regulator, Dish TV made public the minutes of its annual general meeting that showed shareholders had in December rejected adopting the company’s annual accounts and reappointment of director Ashok Kurien to the company’s board.
Why it’s important: The disclosure at the satellite TV broadcaster shows that shareholders have lost faith in the company’s management and board of directors. The lenders to Dish TV are now expected to take charge of the firm’s board and appoint their nominees.
Railways to launch Rs 350 billion wagon tender in fiscal first quarter
The Indian Railways is set to float a massive tender in the June quarter to buy 30,000 cargo wagons every year over the next three years at an estimated cost of over Rs 350 billion. Details of the tender are finalised, government officials said.
Why it’s important: The tender will set a record for the railways, which has never bought more than 15,000 wagons in any one year. It will lead to a big boost to domestic manufacturing of railway wagons to carry freight. The extra-large order is in anticipation of increased demand as the dedicated freight corridors come online.
MobiKwik to delay public issue, raise private capital
As the stock market turns volatile on geopolitical tensions and rising oil prices, fintech startup MobiKwik, which had filed draft documents to raise around $250 million through an IPO, is now looking to raise money from the private market. The company’s revenues grew 86 percent on an annualised basis in the nine months ended December to Rs 3.97 billion.
Why it’s important: The stock market has turned bearish after Russia invaded Ukraine and oil prices skyrocketed. The timing of IPOs are crucial in such a scenario and many firms are put plans of going public on the backburner.
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