For the week ended on 23rd September, the market cap of 7 out of the 10 most valuable companies eroded by Rs134,139 crore. Only defensives were in the positive for the week. In terms of big value loss; Reliance Industries lost Rs40,558 crore, HDFC Bank Rs25,545 crore and Adani Transmission lost Rs24,630 crore. Other losers were ICICI Bank Rs18,148 crore, SBI Rs9,951 crore and TCS Rs9,459 crore. For the week, Hindustan Unilever gained Rs35,467 crore ITC Ltd Rs20,382 crore and Bajaj Finance added Rs13,129 crore.
As the Indian rupee slid beyond 81/$ last week, post Fed hike, import of crude and other commodities could become more expensive. This will fuel imported inflation in India. That could create a spiral impact as the rising trade deficit could impose higher pressure on inflation. India imports 85% of daily crude oil needs and 50% of gas needs; so vulnerability is huge. To add to the problems, India’s forex kitty has fallen from $647 billion to $545 billion this year and could deplete further as RBI intervenes to defend the rupee.
FPIs, who had infused more than Rs51,000 crore in August 2022, have now infused just Rs8,638 crore in September 2022 so far, with just one week to go. Clearly, the Fed hawkishness and recession fears have made the FPIs quite wary about investing in emerging markets like India. Going ahead, the uncertainty in China as well as the prospects of further rate hikes could impact FPI flows. In September, FPIs have stayed net buyers in debt too. FPIs are worried as the US economy continues to face high inflation levels
of 8.5%.
Piramal group and Zurich Insurance plan to jointly bid for Reliance General Insurance, a subsidiary of the beleaguered Reliance Capital. Earlier, both had submitted separate bids. They will form an SPV with 50% ownership each. This will also mark the entry of Zurich into the non-life insurance segment in India. In the last round, Piramal had valued Reliance General Insurance at Rs3,600 crore, Zurich at Rs3,700 crore, while Advent had valued the business at Rs7,000 crore. The actuarial valuation of RGIC stands at Rs9,450 crore.
Prime Minister Modi will inaugurate 5G services in India on 01st October. This rollout of 5G services are likely to take India’s digital transformation and connectivity to uncharted heights. Other corporate leaders like Mukesh Ambani, Sunil Mittal and Ravinder Takkar of Vodafone are also likely to share the stage with the Prime Minister. The 5G launch will be rolled out in 7 metros including Mumbai and Delhi. The 5G will be scaled up after launch. However, DGCA clearance will be critical as 5G interferes with
aviation signals.
It looks like India’s own version of Black Friday as the orders placed on e-commerce platforms grew 28% in the first 2 days of the ongoing festive season. Over 7 million items were evaluated and compared with the previous year. The personal care segment was the fastest growing segment with over 70% yoy volume growth in the first 2 days followed by electronics growing at 48% yoy. Even segments like home decor, gift products, furniture and jewellery saw robust growth. Meesho reported 85% orders from non-
metros.
According to the Commerce Ministry, India is on track to attract $100 billion in FDI for FY23. In FY22, India had received record FDI of $83.6 billion. The economic reforms and the ease of doing business are likely to catalyse this growth in FY23. However, for the Apr-June quarter of FY23, the FDI equity flows were lower by 6% at $16.6 billion. With steps to reduce hazardous imports, the import of toys in FY22 fell 70% to $110 million while exports of such toys were up by 61% at $326 million. It promise to be a record year.
A day after Tata Steel merged 7 entities into the company, CFO Koushik Chatterjee said it would provide greater focus and better value discovery of the various businesses. This is part of the Tata group drive to strive for simplification of businesses. It is estimated that the net present value of all the mergers would work out to Rs1,500 crore. Since 2019 Tata Steel has reduced 116 group entities. While 72 subsidiaries ceased to exist, 20 associates and JVs were eliminated and 24 companies are currently under
liquidation.