The price of Brent crude oil fell by 3% on Tuesday, marking the lowest level since August 2023. This was an outcome of weak Chinese data and investors becoming less optimistic about rate cuts by the Fed. Brent crude closed the day at $82.65/bbl while the WTI Crude also fell to $78.35/bbl. The trade data also shows that investors are less concerned about supply shortfalls, since the primary driver appears to be demand. Governor Neil Kashkari has ruled out immediate rate cuts by the Fed as suggested by the CME Fedwatch.
The relatively robust demand for the IPO of Honasa Consumer Ltd (Mamaearth) did not help the stock on listing day as it ended just marginally higher. The stock listed at Rs324, a premium of just 1.85% and closed about 4% above the IPO price. One reason could be large size of the IPO and the pricing, which many of the analysts had opined was on the higher side. Also, people are still wary of such digital companies after the experience they had with the likes of Paytm, Nykaa, Policybazaar and Zomato over the last two years.
In more IPO news, the public offer of ESAF Small Finance Bank closed on Tuesday with subscription of 73.15 times overall. The IPO size was Rs463 crore and it was a combination of a fresh issue and an offer for sale. The maximum oversubscription came from QIBs 173.52 times and HNI / NII at 84.37 times. Even the retail portion got subscribed 16.97 times at close. The IPO was priced in the band of Rs57 to Rs60 and it looks like the price discovery may happen at the upper end of the range. Anchors invested Rs135 crore.
Shree Cement Q2 profits gained from strong infrastructure demand ahead of elections as net profits more than doubled to Rs491 crore. This is sharply higher than analyst estimates. Shree Cements is the third largest cement producer by capacity after Ultratech and Adani Cements. Revenues from operations grew 20% to Rs5,761 crore in the quarter. Sales volume also grew 10% in the quarter at 8.20 million tonnes. The demand for cement is expected to be robust amidst government spending and construction activity.
Flipkart founder, Binny Bansal, plans to shortly launch an AI-as-a-service startup, which will target global customers. Artificial intelligence is the biggest technology growth area globally. Bansal has already hired 15 experts for the venture, most of them artificial intelligence scientists. It may be recollected that Binny Bansal had built Flipkart into a decacorn before selling his stake in Flipkart to Wal-Mart. The start-up will be headquartered in Singapore with principal operations in Bengaluru. It is currently on in stealth mode.
Reliance Industries pans to raise close to $2.4 billion via rupee-denominated bonds; roughly equivalent to Rs20,000 crore. This will be inclusive of the Greenshoe option. The 10-year Rupee-denominated bonds will be auctioned on 09th November 2023 and are rated AAA with a stable outlook by CRISIL and CARE. It will mark Reliance’s first cross border rupee fund raising of this magnitude. Reliance group needs billions of dollars in the next few quarters to bankroll its plans across 5G, digital initiatives, green hydrogen etc.
Apollo Tyres net profits for Q2FY24 more than doubled to Rs474 crore, which his much better than analyst expectations. The outlook presented by the company also suggests that the upcoming agricultural season will increase demand for replacement tyres in FY24 in a big way. For the quarter, revenues were up 5% yoy, largely driven by sales in the Asia Pacific, Middle East, and Africa (APMEA) region. India’s retail vehicle sales had risen by 20% in September; on the back of easing monsoon worries and improved rural demand.
Mukka Proteins, a manufacturer of fish meal, fish oil, and fish soluble paste, received SEBI approval for its IPO. The company plans to issue a total of 8 crore fresh shares and the size of the IPO would depend on the pricing. There is no offer sale component in the IPO. The SEBI has just issued the observation letter, the equivalent of SEBI approval. Mukka Proteins will use Rs120 crore for working capital needs and invest Rs10 crore in its associate, Ento Proteins Private Ltd. The IPO size could be Rs175 crore to Rs200 crore.
