Nifty’s 10 most valuable companies by market cap added Rs.272,185 crore in market value last week. The Nifty itself was up 3.95% while Sensex was up 4.16%. Among big gainers, Reliance added Rs.54,904 crore to its market cap while HDFC Bank added Rs.46,284 crore. Among other value gainers, ICICI Bank added Rs.29,127 crore, SBI Rs.27,979 crore, TCS Rs.27,558 crore, Bajaj Finance Rs.22,312 crore, Bharti Airtel Rs.15,378 crore and Infosys added Rs.13,501 crore. All the top stocks saw value accretion during the week.
Ruchi Soya, part of Patanjali Ayurveda group, has priced its FPO in the band of Rs.615 to Rs.650. The total size of the FPO will be Rs.4,300 crore and the issue will be open from 24th March to 28th March. In fact, the higher end of the price band reflects a 35% discount to the closing price. Bids can be made in multiples of 21 shares. The stock is expected to be listed on 06th April. The funds will be used for repayment of debt and to meet working capital expenses. Ruchi soya was the pioneer of soya foods in India in the 1980s.
In an interesting move, the price of diesel sold to bulk users has been increased by Rs.25 per litre to compensate for the 40% spike in crude prices in last couple of months. This move is likely to hit the private retailers like Nayara Energy, Jio-BP and Shell. Many of the pumps may be forced shut if their cost increases but the retail prices are kept at the same level. Currently, diesel is sold at retail pumps for Rs.94.14/litre but diesel will be sold to bulk users at Rs.122.05/litre. This is a big negative for oil marketing companies.
Even as Maruti continues to be sceptical about the future of EVs in India, its parent Suzuki Motors plans to build a new factory in Gujarat to manufacture electric vehicles (EVs) and batteries and hopes to go on stream by 2026. Suzuki will invest around Rs.10,400 crore into the EV plant. Ironically, other auto players like Tata Motors, Hyundai and even Ashok Leyland have been extremely aggressive about EV plans. Suzuki will leverage its global tie-up with Toyota to enter non-IC (internal combustion) engine vehicle business.
Jindal Steel and Power (JSPL) has announced that its Mauritius based 100% subsidiary had prepaid $357 million to lenders. The prepayment will clear the entire debt on the books of JSPL Mauritius which carried corporate guarantees by JSPL India. JSPL has been reducing its overseas debt and has already cut its global currency debt from $1,800 million to $130 million. As a result, the net debt of the JSPL India book has also come down from a peak of Rs.46,500 crore to Rs.10,981 crore. The plan is to be zero net debt by FY23.
Government extended the timeline for start-ups to convert debt investments made in the company into equity shares from 5 years to 10 years. This is likely to come as a relief to entrepreneurs, especially in the aftermath of COVID-19. This applies to investments in start-ups through the issue of convertible notes. In the last few years, convertible notes have increasingly emerged as attractive financing instruments for early stage funding. Convertible notes offer optional conversion to equity and fewer regulatory covenants.
India is in the final stage of talks to start wheat exports to Egypt. It has traditionally been one of the biggest importers of wheat from Ukraine and Russia. India is in talks with Turkey, China, Sudan, Nigeria and Iran to bridge their wheat imports shortfall due to the Russia Ukraine war. In terms of logistics, the Railways has assured to make sufficient rakes available to meet wheat demand. India produces about 15% of global wheat output but its share in wheat exports is just about 0.54%. This will be the big opportunity for India.
Future Group plans to convene a meeting of shareholders and creditors on 20-21 April to get approval for the Rs.24,713 crore merger deal with Reliance. It is not clear what would be the sanctity of these meetings after Reliance has almost taken over most of the stores of Future group for non-payment of lease rentals. Most of the store were also being stocked by Reliance JioMart and FRL had defaulted on lease payments as well as on inventory payments. It remains to be see, what is the status of the funds owed to the banks.