For the week ended 06th January 2023, 8 out of the top 10 largest companies by market value saw erosion to the tune of Rs106,991 crore. IT and banks were among the worst hit. Among big losers, Infosys gave up Rs25,185 crore, HDFC Bank lost Rs18,375 crore, TCS Rs17,289 crore, ICICI Bank Rs14,448 crore, State Bank Rs11,245 crore, HDFC Rs7,419 crore, Reliance Rs7,408 crore and Bharti Airtel Rs5,621 crore. Among gainers, LIC added Rs14,105 crore in market cap last week while Hindustan Unilever added Rs4,053 crore.
Urban office space absorption was 1.7 million SFT in December 2022 quarter as per CBRE. Sectoral mix of absorption was dominated by technology at 43%, followed by engineering 17% and flexible operators at 12%. Deals gravitated to the small and medium quadrant below 50,000 SFT mark. Bengaluru led in office space absorption followed by Delhi-NCR and Pune. Deals in the cities of Hyderabad, Mumbai, Chennai and Ahmedabad were relatively lower. The BFSI absorption is expected to increase in the March 2023 quarter.
Indian government has reportedly received multiple bids for its majority stake sale in IDBI Bank. The last date for submitting EOI closed last Saturday. Currently, government owns 45.48% and LIC owns 49.24% in IDBI Bank. Both, jointly, plan to divest 60.72% in IDBI Bank, reducing their combined stake to 34%. The transaction will now move to the second stage, which entails due diligence of the bidders. The teething issues were resolved with the government stake being classified as public holding, limiting voting to 15%.
Jindal Steel and Power (JSPL) plans to invest Rs1,500 crore to operationalize Monnet Power, which it had recently acquired from the NCLT. This investment will be phased over the next 18 months. The under construction 1,050 MW coal-based power project of Monnet is very close to the Angul steel plant of JSPL. Once completed, it will provide power to JSPL’s steel plant in Angul with coal sourced from Utkal B1/B2 mines of JSPL. It had won these coal blocks last year with nearly 347 MT of reserves, via e-auction process.
Speciality Restaurants, which runs marquee restaurants like Mainland China, Oh Calcutta, Sigree etc, just touched a record high price of Rs268 amidst strong volumes. The stock has rallied more than 120% in the last 6 months. It also operates restaurants across Qatar, UAE and UK; with a network of 83 restaurants and 38 confectionary stores. In 2022 alone, the stock almost tripled in value. It has been focussing on controlling costs, enhancing value and delivery through cloud kitchens, even as it remains fully debt-free.
The stock of Dabur India fell 4% on Friday to Rs552 after it guided for 250 bps lower operating margins in the personal care products business in Q3. The impact will be due to sticky input costs as well as adverse currency movements. The company has also been struggling with weak rural sales, which has kept its top line growth under pressure. Broadly, Dabur has guided weak demand trends in Q3FY23. The late onset of winter in North India could accentuate problems for Dabur. International volumes are likely to be strong.
FPIs turned net sellers in the first week of 2023 as hawkish FOMC minutes led to a sharp sell-off in IT stocks. FPIs were nervous ahead of earnings numbers of TCS, Infosys, Wipro and HCL Tech; resulting in net FPI outflows of Rs5,872 crore in the week. Overall outflows, including debt and VRR, stood at Rs7,908 crore for the first week of 2023. The sharp sell-off resulted in the Sensex losing 1,400 points in just the last 3 days of the week. In December, the FPIs bought in consumer facing sectors but sold IT and Financials.
World Bank in the bi-annual “Global Economic prospects” report has warned of further adverse shocks that could push the global economy into recession in 2023. According to the World Bank, the lag effect of all the central bank hawkishness will lead to global growth decelerating sharply in 2023, anyways. There are also chances of debt distress in several emerging and developed economies. Hence, an fiscal support in this year should only be given to very vulnerable groups. IMF has also warned of a tough economic year.
