LIC is expected to publish key details of its IPO in the fourth week of January. It is now being reported that the IPO may happen in the third week of March 2022. The government will try to raise up to Rs.90,000 crore via the IPO. The government has to complete the filing of DRHP soon so that the other formalities can commence. The embedded value is expected at around Rs.400,000 crore which could normally justify an overall valuation of 3.5X to 4X of embedded value. It will be key to the divestment program in 2021-22.
At the Vibrant Gujarat Summit 2022, Reliance Industries has signed MOUs with the Gujarat Government for total investments of Rs.595,000 crore. These investments will be made in Gujarat over the next 10-15 years, wherein Reliance will set up a 100 GW Renewable Energy Power Plant and Green Hydrogen Eco-System. Reliance will invest another Rs.60,000 crore in renewables like PV modules, polysilicon etc. These projects are expected to create 10 lakh jobs. Another Rs.25,000 crore will be invested in existing projects.
The NCLAT agreed to hear Amazon’s plea challenging the CCI suspending of approval to the 2019 deal with Future Coupons on 02nd February. NCLAT has also directed the CCI and Future Coupons to file their replies in the next 10 days. CCI had suspended the deal between Future Coupons and Amazon and had also imposed a penalty of Rs.200 crore on Amazon for misrepresenting facts. Amazon has also approached Supreme Court to halt FRL’s sale to Reliance Retail. CAIT has also appealed against Amazon in this case.
In the year 2021, some of the biggest listings in the IPO market underperformed the market and ended with negative returns of 20% to 50%. In fact, 8 out of the 12 IPOs with size of Rs.2,500 or more are trading below their issue prices. In fact, many of the marquee issues like Paytm, Star Health, PB Fintech, Nuvoco Vistas, CarTrade and Aditya Birla MF are all quoting well below their issue prices. There was a good deal of euphoria built in digital stocks but the follow up buying post listing could not match the IPO enthusiasm.
It was another month of a wide trade deficit of $21.7 billion. For December, India’s merchandise exports came in at $37.8 billion, but imports stood at a whopping $59.48 billion. Both exports and imports have surged over last year and over the 2019 period, but the pressure on the trade deficit is palpable. For the Apr-Dec period, total exports stood at $301.3 billion while imports too were $443.82. Exports of items other than petroleum and G&J were up 29.6% while the imports of this segment were up by a good 34%.
Adani Group and POSCO of South Korea signed an agreement to set up of an integrated steel mill in the western state of Gujarat. This deal was announced at the Vibrant Gujarat Summit 2022. Total investments under the MOU are estimated to be in excess of $5 billion. This would be a green, environment-friendly integrated steel mill at Mundra. POSCO currently operates a 1.8-million-tonne cold-rolled and galvanized mill in the state of Maharashtra and supplies to auto makers. Adani plans to be net-zero carbon by 2025.
TCS has fixed the buyback price at Rs.4,500 per share, which is a 17% premium to the current market price. While previous buybacks were around Rs.16,000 crore, this time the buyback amount is higher at Rs.18,000 crore. Currently, TCS trades at 31X forward earnings and a premium buyback surely instils confidence in the shareholders. In its Dec-21 review, TCS had announced solid growth in top line, although its operating margins had fallen by 189 bps yoy. TCS has announced interim dividend of Rs.7 per share.
The world’s largest contract chip manufacturer (FAB), Taiwan Semiconductor Manufacturing Company or TSMC, plans to boost its manufacturing capacity by 47% amidst soaring demand for microchips. It is estimated that the outlay involved is around $44 billion. TSMC had invested $30 billion last year and the FAB business remains an extremely capital intensive business. Globally, TSMC, Samsung and Intel acc
ount for 60% of all chips manufactured in the world. Supply of chips has failed to keep pace with the demand.