Even as AI for stock trading is seeking prominence, seeking the best advisor in the stock market, oil marketing companies (OMCs) are grappling with losses due to shrinking marketing margins amid surging crude prices, government is looking to stagger its capital infusion into OMCs. The government had budgeted Rs30,000 crore for capitalization of PSU OMCs, but that is likely to be reduced for this fiscal and staggered across a longer time frame. The staggered release would be done after assessing the financial position of these OMCs. Delaying the capital infusion can also delay the equity dilution and EPS dilution.
One of the leading global investors, Invesco, has decided to mark up the valuations of Swiggy to $7.85 billion, which is still 30% lower than the valuations that Swiggy commanded about a year and a half ago. In July of this year, Invesco slashed the valuation of Swiggy to $5.5 billion. The very same Invesco led a funding round for Swiggy in January 2022 at a staggering valuation of $10.7 billion. This puts the valuations of Swiggy and Zomato almost at par. In the last few months, Zomato market cap has leapt to $11 billion.
Hero Fincorp, 40% owned by Hero Motocorp, has identified eight premium investment bankers for their forthcoming Rs4,000 crore IPO. Apart from the holding by Hero Motocorp, the Munjal family holds about 35–38% of Hero Fincorp, with private equity investors like ChrysCapital and Apollo Global holding the other remaining shares. Hero Fincorp is a NBFC with net profits of Rs 458 crore in FY23 on revenues of Rs 6,004 crore in the year. Big names like JM Financial, BOFA Securities, Jefferies, I-Sec, and UBS are likely BRLMs.
The government of India will sell a 7% stake in HUDCO via offer for sale (OFS). The floor price for the OFS has been set at Rs79 per share. In the last year, the stock has more than doubled. In all, the government will sell more than 14 crore shares of HUDCO. On day 1 of the OFS, the government will sell 7 crore shares of HUDCO with a greenshoe option to sell another 7 crore shares based on demand. This option will be exercised on the second day of the OFS. Non-retail investors can only place their bids on Day 1 (18-Oct).
As global oil prices are still down from recent peak levels of $98/bbl, the government has opted to reduce the windfall tax on petroleum crude oil effective October 18, 2023. The windfall tax on crude petroleum has been reduced from Rs 12,200 to Rs 9,050 per ton. The windfall tax on aviation turbine fuel (ATF) has also been cut from Rs3.50 per litre to Rs1.00 per litre. The windfall tax on diesel has also been cut from Rs 5 per litre to Rs 4 per litre. The windfall tax is meant to prevent supernormal profits for upstream oil units.
Amidst all the current troubles on the debt front, Vedanta has started exploring tie-ups with Japanese companies for chip technology to serve its upcoming chip plant in Gujarat. Vedanta has ambitious plans to set up a semiconductor fab (fabrication unit) in Gujarat. Incidentally, Japan is the second quad partner other than the US, to sign an agreement with India for joint development of the semiconductor system. Japan ranks among the top 5 countries in the world based on their prevailing semiconductor ecosystem.
It was another impressive quarter for Bajaj Finance, as net profits were up 28% to Rs 3,551 crore. This was on the back of a 26% expansion in net interest income (NII) to Rs 8,845 crore. The cost of funds was just marginally higher at 7.67% in the quarter. Bajaj Finance has been seeing compression in net interest margins (NIMs) for the second sequential quarter. Meanwhile, Bajaj Finance also announced that it would pick up a 26% stake in Pennant Technologies, a FinTech company, to strengthen technology infrastructure.
Russian oil freight rates are up 50% as the US has tightened its scrutiny of shippers transporting Russian crude at a price above the cap of $60/bbl. The tighter regulations have forced more shippers to move out of the Russian market. Even India plans to reduce its dependence on Russian oil further amidst rising freight costs. However, Russia is likely to offer wider discounts to encourage the offtake of Russian oil, especially by large buyers like India. Russian oil exporters had seen higher profits on lower freight rates.