The GST Council is planning to do away with the 5% GST slab and replace it either with a 3% slab or an 8% slab on a case-by-case basis. This is an announcement on which most states are in sync. The GST Council may also look to prune the list of exempt items and transfer most of them to the 3% slab to boost GST revenues. Last year, the government had set up a panel of state ministers to suggest ways and means to augment revenues by rationalizing tax rate and rectifying anomalies. There have been a series of rate cuts.
FY22 looks like a solid year for the spread of the mutual fund cult in India. Apart from greater awareness, digitisation of KYC and transactions as well as robust equity markets also helped. During FY22, mutual funds added a whopping 3.17 crore folios, taking the total MF folios to 12.95 crore. The folios are normally dominated by retail equity investments. That is nearly 4 times the number of new folios added in FY21. Retail investments account for 10.34 crore folios out of these. SIPs have been a big driver of MF folios.
Foreign portfolio investors (FPIs) withdrew nearly Rs.4,500 crore from Indian equity markets in the previous week after Rs.7,707 crore infusion in the first week. For the month of Apr-22 till date, FPIs are still net buyers to the tune of nearly Rs.2,500 crore. This is surely some relief after the frenetic selling of Rs.1.40 trillion during the previous fiscal year FY22. FPIs had sold Indian equities on concerns over Ukraine war, inflation concerns, Fed hawkishness as well as vulnerability of Indian markets to value contraction.
Godavari Biorefineries, a leading manufacturer of ethanol and bio-ethanol based chemicals plans to tap the Indian primary market with its maiden IPO. However, the company is yet to take a final call, which will be based on the market conditions and the geopolitical scenario. The IPO was approved by SEBI in Nov-21, so the company has time till Nov-22. The Rs.700 crore IPO of Godavari Biorefineries will comprise of a fresh issue of Rs.370 crore and an offer for sale of Rs.230 crore by the promoters and early shareholders.
Oil Ministry stopped fresh allocation of natural gas from domestic fields to the city gas (CGD) sector. This is likely to raise questions over the viability of the Rs.2 trillion investment planned in the sector. It is also likely to result in a spike in the price of CNG and piped cooking gas prices as supply gets constrained amidst rising demand. CGD operators have been requesting the ministry to maintain the gas supply to the sector but the ministry has not made any fresh allocation for more than 1 year. Prices have been hiked by 110%.
In the truncated week ended on 13th April, a total of 7 of the 10 most valuable companies by market cap on the Nifty saw value erosion of Rs.132,536 crore. Reliance took the biggest hit, losing Rs.43,491 crore in the week, followed by Infosys losing Rs.27,954 crore, HDFC Bank Rs.27,866 crore, HDFC Rs.14,631 crore,
TCS Rs.9,349 crore and Hindustan Unilever Rs.7,119 crore. The big gainer during the week was Adani Green Energy, which gained Rs.84,582 crore in market cap, followed by ICICI Bank up by Rs.5,559 crore.
Maruti is realizing that it may have delayed its EV foray and wants to make up for lost time. The new CEO of Maruti, Hishashi Takeuchi, confirmed that Maruti Suzuki will launch multiple EV models in India, starting 2025. This was inevitable considering that the government has been pushing for 30% EV penetration for private cars by 2030. Currently, there are about 8.77 lakhs active EVs on Indian roads. The PLI scheme for setting up manufacturing facilities for ACC Battery Storage in India with Rs.18,000 crore outlay is running.
Government plans to call financial bids for HLL Lifecare from Piramal, Adani, Apollo Hospitals and Megha Engineering among eligible bidders. Currently, the due diligence is on. The deal is currently held up since the Kerala state government has been asking for first right to hold assets and land of the PSU, which is based out of Kerala. They want to the state to be made part of the bidding process. The deal envisages flexibility to the strategic acquirer for exit from non-core businesses. Its authorized capital is Rs.300 crore.
