SBI looks to raise up to Rs10,000 crore via additional tier-I bonds (AT-1) this week. However, it is still to take a call on locking in at higher yields. This funding will support business growth and replace bonds that are maturing this year. However, the final call will be taken based on the direction of yields, which have hardened in the recent past. SBI has plans to raise Rs50,000 crore via bonds in FY24, of which Rs20,000 crore will be through AT-1 bonds, Rs10,000 crore via Tier-2 bonds the balance from infrastructure bonds.
Start-up funding in the first half of 2023 fell 36% to just $3.98 billion across 298 deals. According to PWC, it was $5.9 billion in the first half of 2022. The most funded sectors were Fintech, SAAS and D2C, as has been the case in recent years. While funding sources may have temporarily dried up, most VC and PE firms are flush with cash and that has to be deployed, sooner rather than later. The other trend PWC sees is that there is now more due diligence happening especially on process and governance related subjects.
Adani Enterprises plans To Raise Rs12,500 crore via share sale to investors. In addition, Adani Transmission and Adani Green Energy will also raise Rs21,000 crore between them. In the last 4 years, the group has raised close to $9 billion of capital to fund their massive growth plans. The funds are meant to fulfil the 10-year roadmap for the company as espoused by the company in the year 2016. The company had gone slow on capital raising after the Hindenburg saga, but not it is back in the market with aggressive plans.
Byju’s may be in for some more trouble as the Serious Frauds Investigation Office (SFIO) has initiated a probe into alleged governance lapses and financial reporting compliance failures at the company. The SFIO comes under the aegis of the Ministry of Corporate Affairs (MCA). This was apparently triggered by the resignation of 3 non-family directors from the board of Byju’s citing differences with the promoter. In the meanwhile, Byju Raveendran proposed setting up a Board Advisory Committed to monitor such issues.
It is hardly surprising that with the markets in the midst of a bull rally, there is rush to open fresh demat accounts. June 2023 saw record demat account additions in the last 13 months with 23.6 lakh accounts being opened. This has taken the total number of demat accounts across NSDL and CDSL beyond 12 crore. The first quarter of FY24 saw Nifty touch 19,500 as FPIs infused nearly $14 billion into Indian equities in the last 65 days. While the mainline indices rallied 8% in FY24, mid-cap and small cap indices did better.
For the week ended July 07, 2023, a total of 6 out of the top 10 most valuable companies by market cap added Rs119,763 crore in market cap. The bellwethers were Reliance and ITC. In terms of value, RIL added Rs57,339 crore, ITC Rs21,291 crore, SBI Rs18,697 crore, TCS Rs9,221 crore, ICICI Bank Rs8,998 crore and Hindustan Unilever Rs4,218 crore. Value depletion was seen in HDFC Bank which lost Rs22,926 crore, HDFC Ltd Rs9,783 crore and Bharti Airtel Rs5,220 crore. Infosys also experienced some minor value loss.
Amidst the euphoria over the surge in demat accounts, the National Securities Depository Ltd (NSDL) has filed draft papers with SEBI for its proposed IPO. The IPO will entail the offer for sale (OFS) of 5.72 crore equity shares by existing shareholders. Among major investors participating in the OFS, IDBI Bank will offer 2.22 crore shares, NSE 1.80 crore shares, Union Bank 56.25 lakh shares while HDFC Bank and SBI will offer 40 lakh shares each. Government owned SUUTI will also tender 34.15 lakh shares in the OFS of NSDL.
Reliance Retail has been valued at Rs7.72 trillion ($93 billion) by EY and BDO ahead of the proposed stake sale by the parent. RIL proposes to buy back the non-promoter shares at Rs1,362 per share to reduce the capital of the retail unit. Reliance Retail Ventures, in which RIL has 85.06% stake, owns 99.93% in Reliance Retail. Hence, the price of Rs1,362 offered by Reliance to buy out the residual stake is about 50% higher than the valuations assigned. The last fund raising for Reliance in 2020 was at a valuation of $57 billion.