The RBI State of the Economy released on 20th February 2024, has underlined that Indian corporates must get their act together and use lower borrowing costs to boost capex. Today, capex is still being driven by the government and PSUs, with little participation from the private banks. The RBI report hinted that the rates of interest had already started tapering after the interim budget had given indications of sharply lower levels of fiscal deficit in FY24 and FY25. Private banks have been focusing only on consumer loans.
JSW group initiated talks with Volkswagen AG for supply of technology and components for its Rs40,000 crore electric vehicle (EV) project in the state of Odisha. Volkswagen has already announced a deal to supply components for EVs and battery cells to M&M. This is a private initiative of the Jindal group and it may look at financial partnerships in future. Today, the price difference between EVs and ICE vehicles is almost 30%, which is impeding the growth of EVs in India. China sells 100 times the EVs that India sells.
Novelis Inc, part of Hindalco group, has confidentially filed with the Securities and Exchange Commission (SEC) of the US for a proposed IPO. Novelis will be one of the few global subsidiaries of Indian companies to be listed abroad as a standalone entity. The issue will entirely be an offer for sale (OFS) by the parent, so there will be no fresh funds flowing into the company. It may be recollected that Hindalco had acquired Novelis in 2007 for $6 billion. In 2020, Novelis bought Aleris Corp at an enterprise valuation of $2.8 billion.
Kohlberg Kravis Roberts (KKR) may look to exit Avendus more than 8 years after it took a majority stake. KKR has roped in Nomura as the sell side advisor for the transaction. In 2015, KKR had picked up a controlling 58% stake in Avendus Capital for $120 million, valuing the firm at $206 million. Other investors in Avendus including Gaja Capital and key members of the founding group. Overall, it is estimated that up to 75% of the stake in Avendus may be up from grabs. PE funds are likely to be likely buyers of this stake.
Ramkrishna Forgings, supplier of rolled, forged, and machined products, has secured a $220 million order from the North American market. This will be the first foray of Ramkrishna Forgings, supplying to Tier-1 customers in the American light vehicle segment. This is likely to make the company a key player in the automotive supply chain. This deal will help the company to further strengthen its foothold in automotive forging market. The order is likely to be executed over the next 10 years and it proper it to a new plane.
Indian carbon black exports are likely to pick-up sharply in the light of geopolitical developments and the realignment of global supply chains. Carbon black exports in FY25 are likely to double over current fiscal, according to CRISIL. The industry saw a capacity surge of 36% in last 2 years. EU is the largest importer of carbon black globally and chunk of the demand used to be met by Russia and China. Manufacturing costs have shot up in China, as have environmental restrictions, opening the gates for Indian carbon companies.
Raymond Realty announced the launch of its latest project in Bandra, its first project outside of Thane.
The project titled, “The Address by GS, Bandra” is spread over 2.74 acres, offering a gated community in Bandra East with quick connectivity to key locations. The project offers a mix of 2, 3, and 4 BHK apartments along with world class amenities like 16000 SFT clubhouse. The projections indicating revenues of over Rs2,000 crore from the project. It will offer luxury living in a gated community with world class amenities.
If rural demand has been a concern for FMCG companies, Nestle is doing its bit to overcome this block. In 2021, Nestlé India declared that it would expand reach to 120,000 villages by 2024 by sprucing up its rural distribution channels. In fact, by early 2024, Nestle has already expanded its direct coverage to 196,000 villages. According to the CEO, Suresh Narayanan, 20% of the revenues of Nestle came from rural market and set to scale to 25% by end of 2028. Its RURBAN platform uses advanced analytics and micro activation.