The gist of the Fed minutes announced late on 21sts November 2023 was that the Fed would move very cautiously on any future interest rate moves. This applies to moving rates up and down. However, there was no commitment in the policy minutes about any of the members of the FOMC pushing for rate cuts, which is quite contrary to what the CME Fedwatch would have us believe. In the Fed meeting held on October 31 and November 02, 2023, the Fed had held rates in range of 5.25% to 5.50% with hawkish hints.
Amidst the chaos among airline companies over availability of parts, Indigo Airways and Air India plan to source their parts locally. To begin with, these airline companies would shift reliance on local vendors for their non-critical parts and then expand the domestic portfolio appropriately. Both are seeking DGCA clearance for this decision. This is the trend that even prevails in the US and is likely to assure time and cost benefits to the airline companies. Both these airlines are in the midst of substantial fleet expansion.
FDI equity inflows into India contracted by 24% in the first half of FY24 ending September 2023. There was a fall in FDI inflows from key centres like UAE, Singapore, Mauritius, the US, and UK. In the first 6 months, the FDI into equities stood at $20.5 billion In the first half, September was the only month that saw MOM increase in FDI flows into Indian equity. However, inflows increased from Japan, Germany, and the Netherlands. Construction saw higher FDI, while FDI in computers, IT services, auto and chemical fell.
It looks like thematic mutual funds are back in reckoning, having garnered Rs14,000 crore in five months via the NFO route as well as the regular route. This is an indication of higher risk appetite among investors as well as an aggressive hunt for alpha. Even within thematic funds, it was banking funds that attracted the maximum interest from investors. One reason could be that the valuations have been attractive in this space, but the other more pragmatic reason is also that they represent the most liquid market niche.
It looks like an endless stream of troubles for Byju’s and the latest comes in the form of the edtech major facing the heat of the Enforcement Directorate (ED) over forex violations to the tune of Rs9,400 crore. These violations happened even as Byju’s continued to attract foreign money between 2011 and 2023. However, similar such notice was also issued to Flipkart in 2021 and it remains to be seen how serious are these allegations. They are procedural over submission of import documents against advances remitted.
TCS has taken a $125 million hit in the third quarter over a US lawsuit. This impact is likely to be felt in the December 2023 quarter results of the company. This pertains to the ongoing case of Epic’s healthcare, which had alleged that TCS and Tata International America Corp had stolen intellectual property belonging to the client. This being a contingent provision will be treated as an exceptional loss. TCS had been found to be guilty by a 2016 jury and was asked to pay damages of $940 million, later reduced to $420 million.
Anchor investors of Tata Technologies invested Rs791 crore in the company, amounting to 26% of the IPO size, a day ahead of the IPO opening. There has been a lot of enthusiasm over the Tata Technologies IPO, as it is the first Tata group IPO since TCS in 2004. The anchor placement was spread across 67 anchors and made at the upper end of the price band at Rs500 per share. The Tata Technologies IPO of Rs3,043 crore is entirely an offer sale. Tata Motors is the promoter of Tata Technologies. This will be adjusted to QIBs.
The fortnight to Diwali this year saw a sharp 49% spike in online sales. This was on the back of 35% spike in traffic, which implies that conversion rates also went up sharply. The World Cup fever also contributed substantially to the surge in shopping. Nearly a third of the shoppers were influenced by online ads while another one-third were influenced by brand websites. Holiday shopping and Black Friday shopping is a big business model in the US and the West and that online shopping proclivity is slowly coming to India too.