Carlyle Group selected JPMorgan and Kotak Mahindra Capital to arrange the proposed IPO of Hexaware Technologies. Carlyle plans the IPO around the fourth quarter of 2024. The IPO size would be $1 billion and it would be done at a valuation of $6 billion. This IPO would be largely by way of offer for sale (OFS) offering an exit to Carlyle Group. This will mark the largest IPO in India since LIC in May 2022. Hexaware is a provider of IT and business process outsourcing, and also offers cloud, data, and artificial intelligence.
Foreign portfolio investors (FPIs) infused $1.64 billion into Indian equities in the second week of April, after marginal outflows in the first week. FPIs are now getting aligned to better GDP data, lower inflation, and lower current account deficit. However, with the worsening war situation in West Asia; the risk looks to be quite high for FPIs. Fitch recently downgraded China’s sovereign credit rating outlook from stable to negative; and that has driven lot of money out of China into other EMs. Monsoons are likely to be normal.
For the week to April 12, 2024, a total of 7 out of the top 10 listed companies by market cap saw value accretion of Rs59,405 crore; despite being a truncated trading week. Among the big gainers of the week, Bharti Airtel added Rs19,029 crore to its market cap, ICICI Bank Rs15,363 crore, Reliance Rs 10,250 crore, TCS Rs7,508 crore, ITC Rs2,809 crore, and Infosys Rs2,304 crore. Among the losers for the week were HDFC Bank giving up market cap of Rs23,171 crore ahead of Q4 results and LIC dropping Rs13,441 crore.
After a tough year for world trade in 2023, the WTO (World Trade Organization) expects world trade to grow by 1.2% in 2024. Year 2023 had seen -1.2% contraction in trade. Of course, this is the volume of trade and growth in value of trade may be different. In 2023, world trade had fallen by -5% in value. In value terms, global merchandise exports stood at $23.8 trillion, while imports stood at $24.2 trillion; which is effectively a contraction of 4.5% in export value and 5.4% in import value. Overall trade was also down.
Varun Beverages, better known as one of India’s largest bottlers of Pepsi, will start commercial production of carbonated soft drinks and energy drinks at its production facility at Gorakhpur, Uttar Pradesh. This will also include value-added dairy products. This plan had been outlined in the previous annual report, where Varun Beverages had hinted at steps to meet increasing consumer demand and tapping into new markets. Varun has commissioned new production facilities at Bundi in Rajasthan and Jabalpur in Madhya Pradesh.
Vodafone Idea will launch a Follow-on Public Offer (FPO) of equity shares to the tune of Rs18,000 crore in this week. The FPO will be open from April 18, 2024 to April 22, 2024. The anchor allotment will happen on April 16, 2024. The price band for the IPO has been set at Rs10 to Rs11 per share. Investors can bid in minimum lots of 1,298 shares. In addition to this IPO, Vodafone Idea is also in talks to raise Rs45,000 crore through a combination of debt and equity. VI has been consistently losing subscribes to Jio and Airtel.
The big sell-off on Friday was on the back of the worsening war situation between Iran and Israel as most of the traders chose to remain light over the weekend. On Saturday, Iran launched a series of attacks on Israel in response to Israel attacking its facilities in Syria, leading to a number of casualties. Iran had given a number of warnings to Israel about its intent to attack. However, the defence systems of Israel ensured that there was little damage to Israel facilities. This attack will shift sympathies of leaders towards Israel. The rising tensions in the Middle East are likely to lead to soaring of air fares. Indian airlines have already decided to avoid flying over Iranian, Israeli, and Jordanian airspace due to the rising tensions. That would mean longer routes and more costs and it remains to be seen how these costs would be absorbed or even passed on to the customers. As of now it is not clear as to how it would impact costs, but it such route diversions have to continue for a longer period, then air fare hikes are absolutely inevitable in the future.