A day ahead of the Fed meet, the Indian rupee closed at an all-time low of 83.565/$. While rate cuts are ruled out in the US for now, there is an outside expectation that the Fed may adopt a hawkish tone in this policy statement to curb inflation, which continues to be sticky. The CME Fedwatch has already ruled out rate cuts in July and is now projecting the first rate cut in September; and that too with a probability of just about 45%. The dollar index (DXY) has been showing a lot of strength and that is pressuring the INR.
According to a recent report by CRISIL, the total production capacity of organized paints sector is expected to double to around 7.80 billion litres per annum (BLPA)by FY27. Out of these additional 3.90 BLPA; close to 2.40 BLPA is expected to become operational in FY25 itself. The total investment outlay for this is likely to be around Rs19,000 crore. The expansion will be largely in the decorative paints segment, which today accounts for 75-80% of the total Indian paints market. Volumes are likely to increase by 10-15% annually.
According to a report, the equity investors using the Zerodha broking platform have collectively realised profits worth Rs50,000 crore in last 4 years. In addition, they are also said to be sitting on book profits of Rs100,000 crore as of date. This goes contrary to the popular perception that retail investors generally lose money in stocks. This is on an AUM of Rs4.50 trillion, so the returns are quite substantial and also in sync with the higher risk on equities. Zerodha has 130 lakh retail clients accounting for 15% retail orders.
In its latest report on Global Economic Prospects, the World Bank has retained its growth forecast for India at 6.6% for FY25. World Bank has also underlined that India will continue to be the fastest growing among the large economies. However, the pace of growth is likely to moderate compared to FY24, due to the base effect. For FY26 and FY27, World Bank estimates India to grow at 6.7% and 6.8% respectively. This is lower than the 8.2% real GDP growth in FY24. Healthy corporate balance sheets are a major plus.
The IPO of Ola Electric has finally got the approval from SEBI. The dates for the Rs7,250 crore IPO is yet to be firmed up, but it should happen soon based on market conditions. Ola Electric will be the first Indian EV company to go public. The IPO will comprise of a fresh issue of Rs5,500 crore and an offer for sale (OFS) of Rs1,750 crore. The Ola Electric founder will also sell about 4.74 crore shares in the OFS. Other selling shareholders will include Indus Trust, Alpine Opportunity Fund, DIG Investment, Tiger Global, Matrix etc.
Bharti Airtel converted $49.87 million worth of foreign debt bonds issued in January 2020 into equity. It may be recollected that Airtel has raised $1 billion via FCCBs in 2020, that were optionally convertible into equity. Accordingly, Bharti Airtel allotted 69.34 lakh fully paid-up equity shares of FV-5 at a conversion price of Rs518 per share. Post the transaction, the total outstanding principal value of these foreign currency convertible bonds (FCCB) listed on the Singapore Exchange stands reduced to just $80.60 million.
The Competition Commission of India (CCI) cleared the proposed acquisition of stakes in TVS Certified and TVS Vehicle Mobility Solution by Mitsubishi Corporation. While TVS Certified is engaged in the sale of used vehicles via the auction method, the latter is a much bigger play on the mobility theme in India. Mitsubishi is a global Japanese brand that does businesses in 90 countries. The role of the CCI is to ensure that such corporate restructuring and combination deals do not result in unfair advantage by stifling competition.
More on TVS group. The recently listed TVS Supply Chain Solutions Ltd (TVS SCS) announced a 5-year strategic contract with Daimler Truck South East Asia for Integrated Supply Chain Solutions (ISCS) out of Singapore. Under the terms of the deal, TVS SCS will establish a robust logistics solution for distributing spare parts and other related items, and also streamline supply chain operations, and will also help to manage 8,000 SKUs and 65,000 order lines a year. This includes a multi-modal seamless transport solution.
