Cello World Ltd. is likely to list on Monday, and the grey market indicates a premium of about 22% over the issue price of Rs 648 per share. Effectively, the listing price of the stock could be in the range of Rs800 per share. It may be remembered that the Cello World Ltd. IPO was entirely an offer for sale by early investors. The IPO was subscribed 38.9 times, with the QIB portion leading the way with 108.6 times. Cello World is a popular manufacturer and distributor of stationery products and other home needs.
For the September 2023 quarter, Bank of Baroda reported net profits higher by 28.4% year over year at Rs 4,253 crore. Profits were up 4.5% sequentially and were much better than street estimates. Gross advances in the quarter grew by 17% to Rs8.3 trillion, of which retail loans recorded 22% growth to Rs1.9 trillion. The net interest income (NII) for the quarter expanded by 7% to Rs 10,831 crore, while the net interest margins (NIMs) fell sharply from 3.33% to 3.07% amidst a higher cost of funds. It hopes to maintain NIMs at 3.15%.
After a long wait, Byju’s has announced its FY22 results. Its core business revenues were up 2.3X, but revenues were never the problem for Byju’s. However, it has only put out standalone numbers, so the consolidated numbers, including Aakash, are still pending. While revenues stood at Rs 3,569 crore, the EBITDA-based loss narrowed marginally to Rs 2,253 crore in the quarter. In FY21, Byju’s reported a net loss of Rs4,588 crore, which is not comparable with FY22 since the consolidated numbers are still awaited.
Major IT companies like Wipro and Tech Mahindra are shedding clients in Asia and plumping for clients in North America, where the margins and retention is much higher. In the case of Tech Mahindra, the ROW revenues fell by nearly 22% year over year. Even other IT companies, like LTI Mindtree, are giving up low-value clients in Asia to focus on US clients. For the IT players, the US continues to be the most lucrative, despite the slowdown. Even Wipro saw a fall in revenues in the APMEA region, although the fall was just about 0.5%.
The good news is that the Rabi sowing season has started on a strong note. Key crops like rice, wheat, pulses, and oilseeds have seen winter sowing about 4% higher than last time. India needs a much stronger Rabi output this year to make up for the weak Kharif output this year. The total land under acreage for the overall Rabi output stood at 12.5 million hectares. In India, winter rice is sown in Tamil Nadu, Andhra Pradesh, and Kerala, while the Kharif sowing of rice happens in East India. It holds the key to food inflation.
The sell-off by FPIs continued in the week, with Rs 3,400 crore of FPIs selling in just 3 days. FPIs sold $1.49 billion of equities in September and $2.95 billion in October, largely on the back of the worsening situation in the Middle East and West Asia as well as the rising US bond yields. In the last 4 weeks, FPIs were net sellers in 13 out of the 19 trading sessions. This comes in the backdrop of FPIs infusing nearly $21 billion in Indian equities between March 2023 and August 2023. Global concerns on rates are the big headwind.
The market cap of 10 of the most valuable companies on the NSE by market cap gained Rs97,463 crore, with Reliance leading the way. Bajaj Finance was the only stock to lose value in the week. The big market cap gainers for the week include Reliance Industries at Rs 36,399 crore, SBI at Rs 15,306 crore, ICICI Bank at Rs 14,750 crore, HDFC Bank at Rs 11,657 crore, Bharti Airtel at Rs 9,352 crore, Hindustan Unilever at Rs 6,320 crore, and Infosys at Rs 3,507 crore. Bajaj Finance lost Rs 5,291 crore in market capital. Nifty and Sensex were up 0.94%.
Even in the midst of slowing volumes, FMCG companies in the quarter have reported robust EBITDA margins. This has been largely triggered by lower commodity prices as well as strict price controls that were introduced by these FMCG companies. Rural volumes are picking up but have been tepid. In the latest quarter, EBITDA margins improved from 26% to 28% as these companies were unwilling to forsake margins for the sake of growth. Urban volumes led with 10% growth, offsetting tepid rural volume growth.