It looks like the dream merger is finally about to be called off. Sony Group is planning to call off its merger with Zee Entertainment due to the steep differences between them on the issue of leadership. Sony is likely to send the termination letter by Jan 20, 2024. With the SEBI pronouncing Punit Goenka as not fit and proper to hold the position of KMP, Sony does not want to take chances. The merger would have set the tone for a $10 billion conglomerate in the media space to match up to Reliance and Disney combine.
The Red Sea crisis is taking a heavy toll on Indian exports with about $30 billion in exports likely to be shaved off in FY24. Amidst attacks by Houthi rebels on cargo vessels in the Red Sea, major shipping lines are avoiding the Red Sea route, which has escalated costs substantially. The hit would be about 6.7% on last year’s export base of $451 billion for India. According to Clarkson Research, number of ships passing through the Suez Canal was down 44% in the second half of December 2023, as compared to the first half.
Adani Ports, India’s largest private sector port operator, has entered the bond market for the first time since the Hindenburg crisis disrupted the group early last year. The issue is garnering big demand. This is after the Supreme Court affirmed that the Hindenburg allegations did not warrant any further probe, beyond what the SEBI was already doing. Adani Ports raised funds through 2 tranches of 5-year and 10-year maturities with coupons of 7.8% and 7.9% respectively. Bids received were twice the size of the issue.
This could come as a bonus for Indian bonds as it now looks like Bloomberg will also include India in their global bond indices. Earlier, only JP Morgan had affirmed that Indian government debt would be included in the JP Morgan bond indices. The inclusion in the bond indices is expected to result in bond flows to the tune of $35-$40 billion in a year. This will not only give international recognition to Indian debt paper, but also interest a lot of passive debt investors. Indian bonds will have weightage of 10% on Bloomberg index.
It was a month of records for mutual fund AUM. The overall AUM of mutual funds in India scaled the Rs50 trillion mark, even as the SIP AUM scaled past the Rs10 trillion mark during the month. The monthly gross SIP flows in December also touched a new record of Rs17,608 crore. The growth in SIP flows and the growth in overall AUM has been frenetic for Indian mutual funds in the last 3 years since the pandemic. MF AUM is a function of flows and index returns. Debt funds saw outflows due to treasury adjustments.
Tata Group has started talks to list Tata Autocomp Systems on the stock exchanges. The company is into the manufacture of auto components. Tata Sons owns around 21% in the company, while the remaining stake is held by Tata Industries. Tata Autocomp Systems had finalized IPO plans to raise Rs750 crore in 2011, but had to shelve the plans due to unfavourable market conditions. The fresh issue part is not clear, but there will be a substantial OFS portion to offer exit to the Tata group. The process has only just started.
Bajaj Auto, India’s top performing two-wheeler company in 2023, has approved buyback of shares worth Rs4,000 crore. The buyback price is set at Rs10,000 per share; 43% above the last closing price. Bajaj Auto will buy back a total of 40 lakh shares, representing 1.41% of the outstanding shares. The promoters, who currently hold 54.94% in the company, will also participate in the buyback. In July 2022 , Bajaj Auto had completed the buyback of shares worth Rs2,500 crore at a price of Rs4,600 per share. It is a sharp spike.
One of the veterans of the mutual fund industry, Anand Radhakrishnan, is likely to move from Templeton MF to Sundaram AMC. He will take charge as the CEO of Sundaram AMC. Anand is part of the core team of Kothari Pioneer MF, who had moved to Templeton when it was merged in 2002. The shift will happen in April 2023, when the current CEO of Sundaram AMC, Sunil Subramaniam steps down. In the last 3 years, Templeton has seen a sharp fall in flows and its AUM after the arbitrary payout freeze imposed in 2020.
